Vision 2030 investments fuel growth in Saudi equity and debt markets: S&P

 

Saudi equity and debt markets boosting due to investments in Vision 2030 

Saudi Arabia’s Vision 2030 initiative is driving strong momentum across the Kingdom’s financial markets, with a particular focus on expanding the domestic corporate bond and sukuk sectors, according to a new report by S&P Global Ratings.

In its latest publication, "Local Ambitions, Global Lessons: Benchmarking Saudi Arabia's Domestic Corporate Bond And Sukuk Markets," S&P highlights how regulatory reforms, infrastructure investments, and capital market initiatives are collectively accelerating the growth of Saudi Arabia’s financial ecosystem.

“The development of Saudi Arabia’s financial markets continues to gain pace due to large-scale Vision 2030 investments, progressive regulation, and efforts to attract foreign capital,” said Timucin Engin, Credit Analyst at S&P Global Ratings.
“These advancements will help local companies diversify their funding sources and secure stable, long-term financing.”

 

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At the heart of these efforts is the Vision 2030 goal of building a liquid, local-currency debt capital market supported by a diverse base of issuers and investors. While hard currency issuance by non-financial corporates is still relatively new, it is gathering momentum.

Despite progress, the Saudi corporate bond and sukuk markets remain concentrated among a limited number of issuers, and foreign participation is still modest. However, S&P believes that continued investment in market infrastructure and supportive policy frameworks will help expand the market’s depth and appeal.

“Deeper domestic capital markets tend to share certain traits—diverse issuers and investors, strong disclosure requirements, good liquidity, and high-quality infrastructure,” said Xavier Jean, S&P Credit Analyst.
“Malaysia and Thailand are leading examples, with Malaysia hosting the world’s most developed sukuk market—over 60% of global issuance originates there.”

S&P also examined international parallels, noting how reforms in countries like Chile and Brazil played a critical role in building strong local bond markets through measures such as pension reform, investor protections, and tax incentives.

 

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Key Highlights:

·        Saudi Arabia’s domestic bond and sukuk markets have grown steadily over the past five years, though they remain dominated by a few large issuers.

·        Foreign investor participation and secondary market activity are still limited but show potential for growth.

·        Continued development is expected to strengthen corporate credit conditions by expanding access to long-term capital and diversifying funding channels.

·        Vision 2030 is acting as a catalyst, driving market reform and infrastructure investment to support a more dynamic financial sector.

S&P concludes that Saudi Arabia’s transformation agenda is laying the groundwork for a more mature, diversified, and globally integrated capital market—a critical step in realizing the Kingdom’s long-term economic ambitions.

Source: Zawya