Huge International Demand for Saudi Government Bonds

Huge International Demand for Saudi Government Bonds
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Huge International Demand for Saudi Government Bonds

Huge International Demand for Saudi Government Bonds

The Saudi Finance Ministry announced Thursday pricing its fourth international bond, attracting massive orders- three and a half folds its value.

The ministry confirmed in a statement the completion of the $7.5 billion bond sale. “The issuance received significant interest from international investors, with the orderbook peaking at $27.5 billion,” it said.

The country is rated A1 by Moody's and A+ by Fitch.

The strong response to the Saudi government bonds reflects the high confidence in the country’s economy. It also shows the investors’ trust in economic reforms the kingdom is working on.

Saudi Arabia has become one of the biggest emerging market issuers, having sold $52 billion in international bonds since its debut in 2016. It plans to boost borrowing this year, along with state spending.

The Kingdom’s 2019 budget revealed a record spending worth SAR1.106 trillion ($295 billion) which is a 7 percent growth rate compared to 2018. According to the figures, the expected revenues in 2019 are estimated at SAR975 billion ($260 billion) with a nine percent growth rate compared to last year.

The budget has proven the solidity of the country’s economy in which the announced figures showed a rise in the spending volume, going in tandem with Saudi Vision 2030 and related national programs.

Saudi Vision 2030 aims at diversifying the economy and achieving stability, economic and financial sustainability, as well as stimulating the private sector and improving the living standards of citizens.



Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)

Saudi Arabia’s non-oil exports soared to a two-year high in May, reaching SAR 28.89 billion (USD 7.70 billion), marking an 8.2% year-on-year increase compared to May 2023.

On a monthly basis, non-oil exports surged by 26.93% from April.

This growth contributed to Saudi Arabia’s trade surplus, which recorded a year-on-year increase of 12.8%, reaching SAR 34.5 billion (USD 9.1 billion) in May, following 18 months of decline.

The enhancement of the non-oil private sector remains a key focus for Saudi Arabia as it continues its efforts to diversify its economy and reduce reliance on oil revenues.

In 2023, non-oil activities in Saudi Arabia contributed 50% to the country’s real GDP, the highest level ever recorded, according to the Ministry of Economy and Planning’s analysis of data from the General Authority for Statistics.

Saudi Finance Minister Mohammed Al-Jadaan emphasized at the “Future Investment Initiative” in October that the Kingdom is now prioritizing the development of the non-oil sector over GDP figures, in line with its Vision 2030 economic diversification plan.

A report by Moody’s highlighted Saudi Arabia’s extensive efforts to transform its economic structure, reduce dependency on oil, and boost non-oil sectors such as industry, tourism, and real estate.

The Saudi General Authority for Statistics’ monthly report on international trade noted a 5.8% growth in merchandise exports in May compared to the same period last year, driven by a 4.9% increase in oil exports, which totaled SAR 75.9 billion in May 2024.

The change reflects movements in global oil prices, while production levels remained steady at under 9 million barrels per day since the OPEC+ alliance began a voluntary reduction in crude supply to maintain prices. Production is set to gradually increase starting in early October.

On a monthly basis, merchandise exports rose by 3.3% from April to May, supported by a 26.9% increase in non-oil exports. This rise was bolstered by a surge in re-exports, which reached SAR 10.2 billion, the highest level for this category since 2017.

The share of oil exports in total exports declined to 72.4% in May from 73% in the same month last year.

Moreover, the value of re-exported goods increased by 33.9% during the same period.