IHS Markit (NYSE: INFO), a world leader in critical information, analytics and solutions, in collaboration with the Saudi Stock Exchange (Tadawul), today announced the launch of the iBoxx Tadawul SAR Government Sukuk Index, a riyal-denominated index aimed at tracking the performance of Saudi government Sukuks. The index is the first of a series of benchmarks for Saudi government Sukuks to be created using Tadawul’s market data and the bond pricing expertise of IHS Markit.
Designed to support the development of local financial products, the index has been selected by Saudi ETF issuer Alinma Investment as the benchmark for a new ETF that will be listed on Tadawul.
“The Kingdom’s inclusion in key international equity indices has paved the way for Tadawul to further strengthen its equity market. As we continue to emerge as a vibrant market, our fixed income securities require similar tools that can support riyal-denominated Sukuks and bonds,” said Khalid Al Hussan, CEO of Tadawul. “Working with IHS Markit creates an opportunity to jointly develop benchmarks and other data-driven services that facilitate access to the opportunities present in the Saudi markets.”
“Tadawul is the cornerstone of capital markets in the region, and we are excited to jointly develop independent benchmarks for the Saudi Sukuk market,” said Sophia Dancygier, head of Indices at IHS Markit. “Our shared goals are to advance transparency in the Saudi capital market and serve the investment needs of financial institutions domestically and internationally.”
The iBoxx Tadawul SAR Government Sukuk Index provides broad coverage of fixed coupon riyal-denominated government Sukuk with a minimum outstanding value of SAR 100 million. IHS Markit will calculate the index’s daily value utilizing its independent global bond pricing service. The index history begins on June 30, 2019, with subindices also available across the broad maturity spectrum.
As of February 2020, the total number of listed securities on Tadawul’s exchange reached 204, with listed companies representing a market capitalization of around SAR 8.5 trillion (USD 2.33 trillion). The Saudi Sukuk and bond market is approximately SAR 352 billion (USD 94 billion) with 70 listings.
IHS Markit administers more than 25,000 benchmark, economic and tradable indices across assets worldwide. These include iBoxx bond indices, iTraxx credit indices and CDX credit derivative indices, as well as the Purchasing Managers’ Index™ (PMI™) series, which are indicators of economic activity in over 30 countries. In the ETF industry, more than $135 billion in assets are linked to iBoxx indices.