International bond and exchange-traded fund investors will now have access to the $2.5 trillion Saudi markets without having to apply for the Qualified Foreign Investor (QFI) status. Eligible investors and clients can access and trade on the Saudi Exchange from June 14.
Clearstream, which is the post-trading services provider of Deutsche Borse Group, will connect the Saudi capital market to its network after joining forces with the Securities Depository Center Company (Edaa), which is also a part of the Saudi Tadawul Group. Clearstream is also the first International Central Securities Depository (ICSD) to offer foreign investors access to the Saudi Capital Market, which is home to some of the biggest bond sales in the region.
This move will give a chance to international investors to have access to the Saudi Capital market by enabling the settlement of the listed government bonds, non-convertible corporate bonds, and ETFs denominated in Saudi riyals. Since the eligible clients and investors don’t have to apply for QFI, this decision is expected to boost demand for Saudi government bonds from international investors and it will also help improve the domestic market liquidity.
Jan Willems, head of global markets at Clearstream said, “The Saudi capital market has been increasingly attractive to international investors. We are excited to now offer our clients access together with excellent market partners with great local reach.”
Saudi Arabia, along with other Gulf states has been observed to be attracting an increasing number of international global bond investors with the issuance in the Kingdom which is valued to be more than $100 billion in the first quarter itself.