Saudi bond trading hits Dh20.5bn on first day

Saudi Arabia yesterday launched the bond market and officials said foreigners can tap the new investment tool in the Middle East's largest economy.

Analysts said the move could form the nucleus of a Gulf bond market that will offset bank liquidity shortages and give public and private institutions a safe and less costly instrument to fund their budgets and development plans.

Banking on foreign capital flow, Saudi Arabia's Capital Market Authority (CMA) organised a forum in London last week to explain the new plan and invite foreign investors to take advantage of an expected deluge of bond and sukuk issues. The first bond session yesterday involved SR21billion (Dh20.5bn), including SR16bn bonds by Saudi Arabian Basic Industries Corporation and SR5bn by Saudi Electricity Company.