Saudi Arabia’s Corporate Bond and Sukuk Markets Gain Momentum Amid Vision 2030 Push

Saudi Arabia’s domestic corporate bond and sukuk markets are showing strong signs of growth, supported by sweeping regulatory reforms, rising investor interest, and massive investments tied to the Kingdom’s Vision 2030 agenda, according to a new report by S&P Global Ratings.

The report highlights a significant expansion in the Kingdom’s domestic debt markets over the past five years. Corporate bond and sukuk issuances soared to $37 billion in the first quarter of 2025, more than doubling from $15.5 billion in the same period of 2020. Saudi Arabia also led the Gulf Cooperation Council (GCC) in primary debt issuance during Q1 2025, accounting for over 60% of the region’s activity with 41 offerings worth $31.01 billion, according to Kuwait Financial Center (Markaz).

Timucin Engin, a credit analyst at S&P Global Ratings, attributed the momentum to “large-scale Vision 2030 investments, regulatory reforms, and enhancements in capital markets infrastructure.” He noted that the maturing market would enable companies to diversify funding sources and secure long-term capital.

While the market is growing, S&P reported that issuance remains concentrated. As of late May, financial institutions held 65% of outstanding corporate debt, followed by state-owned non-financial entities (25%) and private-sector companies (10%).

The Saudi stock exchange data showed that total domestic sovereign and non-sovereign debt issuance accounted for 20.7% of GDP in the first quarter of 2025. Corporate issuance specifically rose to 3.4% of GDP, up from 1.9% in 2020, though still lagging behind levels seen in more advanced emerging markets.

Despite growth, challenges remain. The report warned that rising geopolitical tensions, particularly the Israel-Iran conflict, could impact market stability and investor confidence. Moreover, liquidity and foreign participation remain limited, with Saudi institutions typically holding bonds until maturity. Foreign ownership of Saudi debt instruments remains under 2% of total issuance.

Nevertheless, ongoing reforms aim to deepen the market. Key initiatives include the 2015 resumption of riyal-denominated debt issuance and the launch of the National Debt Management Center’s sukuk program in 2017. The Kingdom has since expanded its network of primary dealers and partnered with global institutions such as Euroclear to improve access and transparency.

Recent sukuk issuances reflect continued momentum. In June, the NDMC raised SR2.355 billion ($628 million), following a SR4.08 billion offering in May.

Complementing these efforts is the Financial Sector Development Program, launched in 2018, and a 2024 investment law that enhances protections for investors and guarantees the free movement of capital.

As Vision 2030 projects continue to reshape the Saudi economy, the Kingdom’s debt capital markets are poised to play a central role in funding national development while opening new opportunities for domestic and international investors.