Saudi Arabia said to plan domestic, international sukuk issue

Saudi Arabia is planning to sell riyal-denominated sukuk to local institutions this year to help strengthen its sukuk market, Bloomberg reported Wednesday, citing unnamed sources.

The kingdom is also looking to sell dollar-denominated Islamic bonds in international markets, but is yet to decide which offering to conduct first, the sources said.

Last month, it was reported that state-owned oil giant Saudi Aramco is planning to issue between SAR 3 and 6 billion worth of domestic sukuk over the next two to three months.

Like its fellow oil exporters in the GCC, Saudi Arabia has been hit hard by the plunge in oil prices from mid-2014 onwards.

The government expects to run a deficit of SAR 198 billion in 2017, and hopes to balance finances by 2020.

The kingdom raised $17.5 billion in a record sovereign bond issuance last October, as it sought to ease its budget deficit caused by falling oil prices.

This year, the world’s top oil exporter plans to raise $10-15 billion from international bond markets, while selling about SAR 70 billion locally, Mohammad Al Tuwaijri, secretary-general of the Finance Committee at the Royal Court, told Al-Arabiya TV in December.