In collaboration with the World Bank, the Capital Market Authority (CMA) will organize a conference dedicated to Sukuk markets (Islamic Bonds) within the Gulf Cooperation Council (GCC) states in Riyadh on 7/3/1438 H. corresponding to 6/12/2016. This conference will be attended by a number of ministers and officials in the Kingdom and a number of the World Bank officials as well as a number of economists, financial specialists, academics and executives in the private sector along with participants in the capital market.
With the participation of officials and specialists, the conference titled ( Sukuk Markets – Challenges and Opportunities) will discuss the challenges faced by Sukuk markets in Kingdom of Saudi Arabia in particular and the GCC states in general. The conference will also discuss the mechanism for developing the capital markets in the region which would be reflected in the development of debt markets hence providing the necessary funding for the private and public sectors. The incentives of demand for Islamic debt instruments will also be discussed. The conference will examine some of the prominent experiences in the world, and the possibility of making use of them to develop the local debt market.
On this occasion, Mr. Mohammed bin Abdullah Elkuwaiz, Vice Chairman of the Capital Market Authority, said the conference is part of CMA's efforts to deepen the capital market and encourage the issuance of debt instruments, in addition to promoting economic development of the Kingdom within the 2030 vision.
He added that the Kingdom's 2030 Vision is based on three aspects; one of which is to make the Kingdom a leading investment power.
Furthermore, the Debt market in the Kingdom of Saudi Arabia is relatively small.. The development of this market requires collaborated efforts and cooperation between multiple agencies that would affect its inception and continuity to the market growth as well as the extent of its attractiveness from investors and issuers. The significance of the debt instruments market lays in completing the investment product system for various segments of investors, and enabling them to diversify their investments, as well as to find alternatives of funding for projects in the public and private sectors. Therefore, the CMA has given high importance to the development of this market through the implementation of a number of initiatives, among which comes first building a strategic national direction for this market and enhancing the efficiency of issuing debt instruments.
In order to develop the primary offering of debt instruments, the CMA is working on a proposal to facilitate the listing procedures, and to overcome organizational and structural difficulties that come across its issuance, in order for the Saudi capital market to be an attractive market for issuers.
In this regard, the CMA will revise the procedures and requirements of offering debt instruments in order to adopt a different systematic review and varying offering requirements based on several considerations. Some of those considerations, for example but not limited to, is the former offeror experiences in offering Sukuk and debt instruments, as well as the credit rating of the offeror, categories of targeted investors, and the level of complexity in the structuring of the offered debt instrument.
In regard to trading Sukuk and debt instruments in the secondary market, the CMA intends to organize the private placement of Sukuk and debt instruments in the capital market, in the hope that this will contribute to raising the number of listed financial instruments and increase the market depth.
