Global bond investors get new path to $2.5trln Saudi market

RIYADH: International bond and exchange traded fund investors will be able to access the $2.5 trillion Saudi market without having to apply for special status.

Clearstream, the post-trading services provider of Deutsche Borse Group, will connect the Saudi capital market to its network after teaming up with the Securities Depository Center Company (Edaa), a unit of the Saudi Tadawul Group.

Clearstream is the first International Central Securities Depository (ICSD) to offer international investors access to the Saudi capital market — home to some of the region’s biggest bond sales.

Eligible clients will be allowed to access and trade on the Saudi Exchange commencing June 14, it said in a statement on Monday.

It will give international investors access to the Saudi capital market by enabling settlement of listed government bonds, non-convertible corporate bonds and ETFs denominated in Saudi riyals.

Eligible customers will not have to apply for Qualified Foreign Investor (QFI) status which could boost demand for Saudi government bonds from cross-border investors and help improve domestic market liquidity.

“The Saudi capital market has been increasingly attractive to international investors,” said Jan Willems, head of global markets at Clearstream. “We are excited to now offer our clients access together with excellent market partners with great local reach.”

Saudi Arabia and other Gulf states are attracting increased interest from global bond investors with issuance in the Kingdom worth more than $100 billion in the first quarter.