Analytics firm IHS Markit has teamed up with Tadawul, the Saudi stock exchange, to develop a series of riyal-denominated indices in order to boost Saudi Arabia’s domestic bond market.
The iBoxx Tadawul SAR Government Sukuk Index, the first benchmark to be launched via the partnership, is designed to track Saudi government Islamic bonds. While the exchange will provide the market data, IHS Markit’s bond pricing engine will provide daily valuations for the listed bonds
The index has been selected by Alinma Investment, a Saudi ETF issuer, as the benchmark for a new ETF to be listed on Tadawul.
Tadawul chief executive Khalid Al Hussan cited the Kingdom’s inclusion in key international equity indices as the motivation for the link with IHS Markit.
“Our fixed income securities require similar tools that can support riyal-denominated sukuks and bonds,” said Al Hussan, chief executive of the Tadawul.
“Working with IHS Markit creates an opportunity to jointly develop benchmarks and other data-driven services that facilitate access to the opportunities present in the Saudi markets.”
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