Saudi Debt Market Doubles to $213.3 Bn

Chairman of Saudi Arabia’s Capital Market Authority (CMA) Mohammed Al-Quwaiz takes part in the Debt Markets and Derivatives Forum 2024 in Riyadh. (Asharq Al-Awsat)
Chairman of Saudi Arabia’s Capital Market Authority (CMA) Mohammed Al-Quwaiz takes part in the Debt Markets and Derivatives Forum 2024 in Riyadh. (Asharq Al-Awsat)
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Saudi Debt Market Doubles to $213.3 Bn

Chairman of Saudi Arabia’s Capital Market Authority (CMA) Mohammed Al-Quwaiz takes part in the Debt Markets and Derivatives Forum 2024 in Riyadh. (Asharq Al-Awsat)
Chairman of Saudi Arabia’s Capital Market Authority (CMA) Mohammed Al-Quwaiz takes part in the Debt Markets and Derivatives Forum 2024 in Riyadh. (Asharq Al-Awsat)

Saudi Arabia’s debt market has doubled to nearly SAR 800 billion ($213.3 billion) by the end of last year, up from SAR 400 billion ($106.6 billion) in 2019, following regulatory reforms under the Kingdom’s Vision 2030.

Sukuk issuances rose by 40%, while liquidity grew by over SAR 2.5 billion ($666 million).

Mohammed Al-Quwaiz, Chairman of the Capital Market Authority (CMA), shared these updates during the Debt Markets and Derivatives Forum 2024 (DMDF 2024) in Riyadh on Sunday.

He said Saudi Arabia’s debt markets are becoming more attractive globally and are nearing a significant milestone under Vision 2030.

Al-Quwaiz noted that global debt markets are worth between $140 trillion and $150 trillion, compared to $115 trillion for equity markets.

He added that Saudi Arabia aims to join more global indices to attract foreign investment.

The focus now is on expanding the debt market’s reach, which is becoming more open to foreign investors than the stock market. Vision 2030 and its projects have also driven up borrowing demand.

Al-Quwaiz noted that bank financing is still the main borrowing source in Saudi Arabia, but the country has started using the debt market as well.

“We’ve seen significant growth in the stock market’s role in financing, and now the debt market is taking shape,” he said.

He explained that the debt market is built on three key foundations: the 2018 Bankruptcy Law, the creation of the National Debt Management Center, and the establishment of the National Committee for Debt Market Development.

This committee, led by the CMA, includes the Saudi Central Bank, the Financial Sector Development Program, the National Debt Management Center, and Tadawul, all crucial to the market’s regulatory and operational structure.

Khlood Al-Dukheil, CEO of Financial Analytics, told Asharq Al-Awsat that the debt market is vital for emerging economies as it provides companies with liquidity and investment opportunities.

“In Saudi Arabia, we are still in the early stages of developing this market,” she said.

“Initially, the government was the main beneficiary, but for the market to grow and deepen, it must also serve private companies and other sectors,” added Al-Dukheil.

The DMDF 2024 featured discussions where leaders from major financial firms talked about the improvements in Saudi Arabia’s debt market.

In a panel discussion called “New Horizons for the Debt Market,” CEO of Edaa, the Saudi central securities depository, Hanan al-Shehri noted that debt market issuances are now six times higher than those in the equity market, indicating significant progress.

Waleed Al-Rashed, CEO of Al Rajhi Capital, said debt investments are less risky than stocks or alternative investments, with returns between 5% and 8%, making them a solid choice for investors.

Majeed Al-Abduljabbar, CEO of the Saudi Real Estate Refinance Company, explained that the debt market helps provide liquidity, boosting economic growth and investment diversity.



Saudi Arabia: Global Mining Needs $6 Trillion in Investments to Meet Demand

Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
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Saudi Arabia: Global Mining Needs $6 Trillion in Investments to Meet Demand

Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)

The global mining industry requires $6 trillion in investments over the next decade to meet rising demand, presenting a major challenge for the sector. This figure was revealed by Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef during an international meeting of mining ministers.

The announcement underscores the mining sector’s appetite for investments, coinciding with Saudi Arabia’s increasing focus on making mining the third pillar of its national industrial strategy.

The meeting was part of the Future Minerals Forum hosted by Saudi Arabia under the theme “Creating Impact,” which gathered representatives from nearly 90 countries and over 50 organizations. The conference highlighted the vital role of mining in Saudi Arabia and the global economy.

Key topics discussed included boosting value addition in mineral-producing countries and developing green metals using advanced technologies and renewable energy.

The ministerial meeting facilitated the signing of several memorandums of understanding aimed at strengthening international partnerships and advancing Saudi Arabia’s mining and minerals sector.

In 2022, Saudi Arabia increased its estimated untapped mineral wealth from $1.3 trillion to $2.5 trillion, a move intended to support the Kingdom’s efforts to diversify its economy.

Global mining investments

In his opening remarks, Al-Khorayef stated that the global mining industry would need investments of $6 trillion over the next decade to meet growing demand, particularly driven by the global energy transition. He emphasized that metals are the foundation of supply chains and are essential for meeting the increasing demand for critical materials.

The minister also stressed the importance of continuing three initiatives launched at last year’s conference, namely, the International Framework for Critical Minerals, a network of centers of excellence to build mining expertise in the Middle East, and a priority-based approach to supply chain development.

He proposed forming a ministerial-level steering committee to oversee these initiatives and called on multilateral organizations to develop a roadmap to mitigate investment risks and enhance collaboration.

In remarks to Asharq Al-Awsat on the sidelines of the conference, Al-Khorayef said that Saudi Arabia is working closely with Arab countries, particularly those with established mining sectors like Morocco, Jordan and Egypt.

The minister highlighted the need for regional integration in mining, as companies often operate across multiple areas, stressing that mining is a key component of Saudi Vision 2030, particularly as the world shifts toward sustainable energy solutions and technologies that require large quantities of minerals.

Yonis Ali Guedi, Djibouti’s Minister of Energy and Natural Resources told Asharq Al-Awsat that his country had signed a new cooperation agreement with Saudi Arabia to enhance collaboration in the mining sector and exchange training expertise. The agreement also includes resource-sharing and highlights Djibouti’s need for Saudi investments, he added.

The minister underlined the significant role Saudi companies could play in developing Djibouti’s mining sector, while also acknowledging progress in local industries. On a broader level, Guedi pointed to the growth of Africa’s mining sector and underscored the importance of maintaining this momentum to meet global demand.

Focus on critical minerals

In comments to Asharq Al-Awsat, Julius Maada Bio, Sierra Leone’s Minister of Mines and Mineral Resources, said that financing remains the greatest challenge for his country’s mining sector.

Exploration of critical minerals, he explained, requires significant investments with high risks, a challenge faced by many African nations. Bio underscored the importance of improving Sierra Leone’s infrastructure and value chain capabilities, from exploration to processing, and expressed interest in leveraging Saudi expertise in mining.

He added that Sierra Leone is seeking to strengthen international cooperation to create a comprehensive framework for critical minerals, with a focus on sustainability.

Malaysia’s Minister of Natural Resources, Environment, and Climate Change Nik Nazmi Nik Ahmad highlighted that the key challenge for his country’s mining sector is its technological gap. He noted that advanced technologies for producing and processing rare earth minerals are concentrated in a few major countries, limiting Malaysia’s competitiveness in global markets.

The minister also pointed to geopolitical tensions disrupting global supply chains, which has complicated matters for countries like Malaysia that rely on trade with both China and the United States.

Despite these challenges, Ahmad stated that his country is working to boost its domestic processing capabilities for rare earth minerals, aiming to reduce its reliance on raw material exports.

Yemeni Minister of Minerals Dr. Saeed Al-Shamasi emphasized Yemen’s valuable mineral resources, including lithium, which is essential for batteries and renewable energy technologies. Yemen also holds reserves of copper and other strategic minerals.

He called for urgent foreign investments to develop the sector, given Yemen’s lack of advanced infrastructure. Al-Shamasi also highlighted Yemen’s efforts to strengthen cooperation with Saudi Arabia, noting the establishment of a Saudi-Yemeni Business Council to facilitate investment across various sectors.

International agreements

During the ministerial meeting, Al-Khorayef signed cooperation agreements with six countries: Djibouti, the United Kingdom, Jordan, Zambia, Austria and France. These agreements aim to strengthen international partnerships and advance the Kingdom’s mining sector.

The accompanying exhibition featured cutting-edge technologies and innovations in mining, promoting global collaboration to achieve sustainability in the sector.

Meanhwile, two global alliances, including local and international companies, won exploration licenses for six mining sites in Saudi Arabia during the seventh round of mining competitions, according to the Ministry’s statement on Tuesday.