Arab News, Thu, Mar 14, 2024 | Ramadan 4, 1445
Saudi Arabia’s second sukuk savings round for March closes at $255.7m
Saudi Arabia:
Saudi Arabia has concluded its second government sukuk savings round for March,
with a total volume of requests reaching SR959 million ($255.7 million),
allocated to 37,000 applicants.
The National Debt Management Center said in a
statement that the financial product, also known as Sah, offers a return of 5.64
percent, with a maturity date set for March 2025.
Looking ahead, the third savings round is slated
for April 21, as per the official calendar for government sukuk.
Participants can access the reserve window through
the digital channels provided by their respective financial institutions,
reflecting Saudi Arabia’s commitment to embracing digitization.
Sah, introduced by the Ministry of Finance and the
National Debt Management Center, represents an initiative within the scope of
the Financial Sector Development Program, which is one of several of the
Kingdom’s
Vision 2030 undertakings.
It aims to increase the fund ratios among
individuals by motivating them to allocate a portion of their income to savings
periodically.
Additionally, it intends to increase the supply of
savings products, raising the awareness around financial literacy and the
importance of savings and its benefits for future plans.
It is also Shariah-compliant, offers annual
returns, and is easy to subscribe to, it also has no fees for participants and
no restrictions on redemption.
In January, a report released by S&P Global
suggested that sukuk issuance globally is expected to total between $160 billion
- $170 billion in 2024, primarily driven by higher needs in some core Islamic
finance countries.
In 2023, global Islamic bond issuance declined by
6.1 percent to $168.4 billion compared to the previous year, due to tighter
conditions in Saudi Arabia’s banking system and Indonesia’s lower fiscal
deficit.
S&P Global further suggested 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 last year.
In February, Fitch Ratings said that the
environmental, social, and governance market for the Shariah-compliant tool is
expected to cross 7.5 percent of global outstanding Islamic bonds in the coming
years.
Fitch added that the future growth of the ESG
sukuk market will be driven by issuers’ diversification plans and governments’
sustainable initiatives.