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HSBC has completed the first securities lending transaction in Saudi Arabia.
The bank acted as custodian and agent lender on the transaction for a large regional asset owner. The bank borrowed Saudi Arabian equities from the asset owner and provided access to the kingdom’s equities market for a global institutional investor, HSBC said in a statement.
Madhur Bhandari, Head of Securities Services, HSBC Saudi Arabia, said: “HSBC was able to structure and support this first-of-its-kind transaction in the Saudi Arabian market. We expect further such transactions to follow.”
Adnan Hussain, Global Head of Agency Securities Lending, HSBC, said: “Saudi Arabia’s opening up of its capital markets to Securities Lending for the first time not only allows us to help asset owners receive potentially higher returns from their Saudi investments, but also facilitates more liquidity into the market and enhance price discovery.”
Since the Capital Markets Authority of Saudi Arabia started permitting foreign investors to directly access its capital markets in 2015. Saudi stocks are now included in the FTSE Russell and MSCI emerging markets indices.
(Writing by Brinda Darasha; editing by Seban Scaria)
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