Bashar Al-Natoor, Global Head of Islamic Finance at Fitch Ratings
In an interview with Argaamon the sidelines of the Arab Federation of Capital Markets conference, Al-Natoor expected that the size of the debt market in the Kingdom would reach about $500 billion within two to three years.
Hewent on to say that there are serious plans from theSaudigovernment and its related sectors to develop the debt market and diversify funding sources away from relying mainly on oil revenues.
The issuance of government bonds is greatly encouraged, not only to expand investor base but also tohelpindividuals saveand achieve investment returnsthroughpurchasing government financial instruments, he added.
Fitch studied a number of sukukand bonds with similar characteristics and risks to compare their returns and performance, Al-Natoor explained. The study found that there was a strong correlation between them in most periods, and thespread in return margins of sukukand bonds were not significantly different.
As for the impact of lower interest rates on the debt market, he believes that the expectedinterest rate cut bythe US Federal Reserve could push the pace of issuances.
Al-Natoor also stressed the importance of the Kingdom’songoing efforts tostrengthen its legislative and regulatory framework to attract more investments and support the development of the debt market.
Bashar Al-Natoor, Global Head of Islamic Finance at Fitch Ratings
In an interview with Argaamon the sidelines of the Arab Federation of Capital Markets conference, Al-Natoor expected that the size of the debt market in the Kingdom would reach about $500 billion within two to three years.
Hewent on to say that there are serious plans from theSaudigovernment and its related sectors to develop the debt market and diversify funding sources away from relying mainly on oil revenues.
The issuance of government bonds is greatly encouraged, not only to expand investor base but also tohelpindividuals saveand achieve investment returnsthroughpurchasing government financial instruments, he added.
Fitch studied a number of sukukand bonds with similar characteristics and risks to compare their returns and performance, Al-Natoor explained. The study found that there was a strong correlation between them in most periods, and thespread in return margins of sukukand bonds were not significantly different.
As for the impact of lower interest rates on the debt market, he believes that the expectedinterest rate cut bythe US Federal Reserve could push the pace of issuances.
Al-Natoor also stressed the importance of the Kingdom’songoing efforts tostrengthen its legislative and regulatory framework to attract more investments and support the development of the debt market.
