RIYADH: Saudi riyal-denominated government sukuk is approved for inclusion in the J.P. Morgan Emerging Markets Government Bond Index and the Bloomberg Emerging Market Local Currency Government Index.
According to a statement, J.P. Morgan confirmed that Shariah-compliant bonds from the Kingdom will be added to its GBI-EM on a phased basis starting Jan. 29, 2027, with an expected weight of 2.52 percent of the index.
Concurrently, Bloomberg Index Services Limited announced that Saudi Arabia’s sukuk will be included in its local currency government index, effective with the April-end 2027 rebalancing.
The inclusions are the latest milestone under Saudi Vision 2030, a key pillar of which is the Financial Sector Development Program which aims to create a diversified, efficient, and deep financial market capable of supporting private sector growth. Deepening the local debt market and attracting foreign portfolio investment are core FSDP targets.
Saudi Arabia’s Minister of Finance Mohammed Aljadaan, who also serves as chairman of the Financial Sector Development Program, and chairman of the National Debt Management Center, welcomed the decisions, attributing them to the unwavering support of the Kingdom’s leadership.
In a post on X, he said:: “The inclusion of Saudi government debt instruments in the J.P. Morgan Government Bond Index for Emerging Markets (GBI-EM) and the Bloomberg Emerging Market Local Currency Government Index reflect the investors’ confidence in our economic transformation, and marks another major milestone in integrating Saudi Arabia within global capital markets.”
He added: “They will contribute towards broadening and diversifying our investor base, while supporting more long-term capital flows into the Saudi debt market.”
In the NDMC statement, Aljadaan added that the milestones “stand as evidence of confidence in the resilience of the Saudi economy,” reflecting continuous efforts to deepen the capital market, broaden the investor base, and enhance the efficiency of government financing instruments.
The minister emphasized that the inclusion will have tangible market benefits.
“The inclusion of Saudi Riyal-denominated sukuk in international indices will contribute to increasing the presence of Saudi debt instruments within global investment portfolios, enhancing liquidity in the secondary market, and raising the international competitiveness of the local debt market,” he said.
In September, J.P. Morgan placed Saudi Arabia on “Positive Index Watch” as a preparatory move to the inclusion. According to the multinational banking institution, the inclusion will initially cover eight issuances of Riyal-denominated government sukuk, with a total nominal value of approximately $69 billion.
Bloomberg further specified that eligible securities are fixed-rate, Riyal-denominated government sukuk with a minimum remaining maturity of one year and a minimum outstanding amount of SR1 billion ($266.6 million). The new version of the Bloomberg index including Saudi Arabia is expected to be published in the third quarter of 2026.
The dual inclusion followed a series of developmental initiatives in the local debt market, including the expansion of the Primary Dealers Program to include international banks, enhanced settlement mechanisms, the introduction of an Over-the-Counter settlement framework in mid-2025, and stronger connectivity with international central securities depositories such as Euroclear.
Both Bloomberg and J.P. Morgan cited these improvements as key factors supporting their inclusion decisions.
