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Contact UsSukuk and Bonds
The Saudi Exchange established its debt market in 2009 to support the listing of corporate Sukuk & Bonds. In 2018, it listed several Government debt instruments. Since then, the Saudi Exchange debt market has grown into one of the largest in the region and several enhancements have been made, encouraging issuers to list more Sukuk and Bonds.
- Trading services
- Post-trade services
Trading services
The Saudi Exchange has one of the most sophisticated trading platforms that creates a seamless experience through full automation and processing. All Sukuk and Bond trading activities are matched, confirmed and executed electronically following a T+2 settlement cycle. The trading engine has been designed to serve multiple types of orders to meet investors’ needs. In addition, the Saudi Exchange provides Over The Counter (OTC) trading for privately placed Sukuk and bonds. The Saudi Exchange platforms support bonds with fixed, variable and zero coupons.
Post-trade services
Securities Depository Center Company (“Edaa”) offers a range of vital post-trade services that make the Saudi capital market more efficient and benefit issuers, investors and members. These include depository services, registry services of Sukuk & Bonds, transfer of Sukuk & Bonds ownership, Sukuk & Bonds ownership restriction and release, clearing & settlement related services, corporate actions and consolidated reporting.
Frequently Asked Questions
By issuers: Raising capital to fund operations or development plans.
By investors: An investment opportunity to receive periodic coupon payments and potential price uplift. A diversification strategy for investors as their portfolios include Sukuk and Bonds along with other securities.
When a company issues stock, it is selling partial ownership in exchange for cash. However, when an entity issues Sukuk or Bonds, it is borrowing cash with an agreement/promise to repay the borrowed amount at maturity.
Stocks are issued by companies only, whereas Sukuk and Bonds are issued by both companies and governmental entities.
Sukuk and Bond prices are considered less volatile compared to equities, while the return on equities could potentially be higher than that of Sukuk and bonds.
Sukuk and Bonds commonly promise fixed returns as well as the repayment of the principal, while stocks does not commonly promise fixed returns, rather, it depends on the company’s performance.
Sukuk and Bond holders have the priority of repayment in the event of company liquidation or bankruptcy.
Sukuk are Sharia-compliant financial certificates through which investors gain partial ownership on an issuer’s assets until maturity. While Bonds are financial certificates through which investors lend money to the issuer, indicating an obligation for repayment at maturity.
Bondholders receive regular interest payments, while Sukuk holders receive a share of the profit generated by the underlying asset.
Sukuk and Bonds are financial instruments issued by Governments or Corporations to raise money from investors for a period of time.
Commonly, over this period, Sukuk and bonds distribute periodic coupon payments (either at a fixed or floating rate). At the end of this period, known as maturity, issuers pay back the money raised from investors, known as the principal.
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