The current makeup of Saudi Arabia’s debt market, and the options for large enterprises looking to raise funds formed the focus for a discussion at the Euromoney Saudi Arabia Conference which concluded yesterday (May 6) in Riyadh.

In particular, the discussions focused on the potential to build an international market for Saudi Sukuk, as more global groups look for alternative sources of longer term funding.

Delegates at the 10th Euromoney Saudi Arabia Conference expressed confidence in the strength and dynamism of the Kingdom’s financial sector, and in particular the opportunities being generated by the current wave of economic reforms.

While the planned opening of the stock exchange to foreign investors in June has been one key area of interest at the event, international banks and financial institutions are also optimistic about the potential to play a larger role in Saudi Arabia’s debt market.

Saudi Arabia is currently looking at ways to promote the local currency bond and sukuk market, which could create significant opportunities for international banks, particularly those with experience of Islamic finance.

Representing two of Saudi Arabia’s largest and most significant corporates, Mosaed Al-Ohali, chief financial officer of Sabic and Mohammad Alotaibi, vice chief executive officer of Finance for The National Shipping Company of Saudi Arabia (Bahri), gave their perspectives on the current state of the debt market, and explained how their enterprises developed balanced financial strategies.

Al-Ohali said: “Large and small companies inside the Kingdom need to have access to long-term funding, which is creating significant appetite for bond issuances. Sabic was a pioneer in the Sukuk market and we believe there is a growing need for the right tools to be in place to ensure correct pricing and ratings.”

Doug Bitcon, head of Fixed Income Funds and Portfolio Management of Rasmala Asset Management and Mohieddine Kronfol, chief investment officer, Global Sukuk and Mena Fixed Income of Franklin Templeton Investments, provided the view from the financial sector, and outlined the incredible steps taken in recent years to develop innovative Islamic financing solutions.

“Total outstanding regional debt stands at about US$200 billion, with 20 percent of that in Saudi Arabia. Both of those numbers are set to increase,” said Kronfol.


Global Islamic bond issuance is expected to reach $175 billion in 2015, up from $110 in 2014, and is projected to hit $250 billion by 2020, according to a recent study.  Out of the $24 billion of bonds issued within the GCC region in 2014, $5 billion was from organisations in Saudi Arabia. Companies issuing Sukuk included National Commercial Bank, Saudi Telecom Co. and Saudi Electricity Co.

Other discussions on the second day included Private Finance for Public Projects, with a particular focus on whether Saudi Arabia’s regulatory environment does enough to encourage private finance.

The 10th Euromoney Saudi Arabia Conference is the longest-running, largest and most influential financial conference in the Kingdom. This year, it attracted around 1,400 delegates from all over the region and the world. – TradeArabia News Service