Arab News, Wed, Mar 20, 2024 | Ramadan 10, 1445
Saudi Arabia closes its March sukuk issuance at $1.18bn
Saudi Arabia:
Saudi Arabia concluded its riyal-denominated sukuk issuance above the $1 billion
mark for the fourth consecutive month in March, government data showed.
The Kingdom’s National Debt Management Center
revealed three tranches of the Shariah-compliant debt product were closed at
SR4.44 billion ($1.18 billion).
It was in November that Saudi Arabia’s sukuk
issuance dropped below the $1 billion mark at SR2.66 billion.
In December, it rebounded to SR10.53 billion,
while in January and February, it amounted to SR8.82 billion and SR7.87 billion,
respectively.
The first tranche offered in March was valued at
SR203 million and is set to mature in 2029, while the second allotment, worth
SR3.69 billion, is due in 2034.
The third, valued at SR540 million, will mature in
2039.
Earlier this month, NDMC revealed that it
concluded its second government sukuk savings round for March, with a total
volume of requests reaching SR959 million, allocated to 37,000 applicants.
In a statement, the insitution added that the
financial product, also known as Sah, offers a return of 5.64 percent, which
will have a maturity date in March 2025.
Sah, introduced by the Ministry of Finance and
NDMC, aims to increase the fund ratios among individuals by motivating them to
allocate a portion of their income to savings periodically.
In January, a report released by credit rating
agency S&P Global noted that sukuk issuance worldwide is expected to total
between $160 billion and $170 billion in 2024, driven by higher financing needs
in Islamic nations.
Fueled by tighter conditions in Saudi Arabia’s
banking system and Indonesia’s lower fiscal deficit, global Islamic bond
issuance had declined by 6.1 percent to $168.4 billion in 2023 compared to the
previous year.
The US-based agency further noted that sustainable
sukuk issuance will also rise in 2024, on the back of the successful UN Climate
Change Conference, also known as COP28, which concluded in the UAE in 2023.
Last month, another report released by Fitch
Ratings said that the environmental, social, and governance market for the
Shariah-compliant debt products is expected to cross 7.5 percent of global
outstanding Islamic bonds in the coming years.
The report added that the growth of the ESG sukuk
market will be driven by issuers’ diversification plans and governments’
sustainable initiatives.