New avenue to institutional trading goes live just as Kingdom's debt appetite ramps up.
In Saudi Arabia, electronic trading pioneer Tradeweb has completed a new alternative trading system (ATS) for trade execution for Sukuk and Saudi Riyal (SAR)-denominated debt instruments. BlackRock, BNP Paribas and Goldman Sachs were among its inaugural trade participants earlier this month.
State of Play: The KSA's Capital Market Authority (CMA) selected Tradeweb to undertake the first regulated bond trading platform build in early 2024, and the launch this month follows a pivotal year for the Kingdom, moving to far more actively engage global debt investors with both traditional issuance and private financing deals, supporting the trillion-dollar Vision 2030 ambitions that have evolved to include capex-intensive projects like AI data center infrastructure.
"Fixed income opportunities [in Saudi] hold great strategic interest for international investors," said Yudhveer Chaudury, Global Head of EM, FX, Commodities and Digital Assets with BlackRock," who said the new platform marks a "technological milestone."
Rael AlHumaid, CMA's Deputy of Market Institutions, likewise noted the buildout is "an important step in enhancing the secondary market for debt instruments, while broadening the investor base and expanding the range of products available in the Saudi capital market."
OQ Take: Tradeweb continues to command its position as leader in EM fixed income cash electronic trading. With the addition of the Riyal, its multi-asset ATS now includes more than 20 local currencies, and is well-positioned at a time when soft currency issuance is growing in preference, along with EM Debt more broadly. Within that, the KSA has attracted lively global buy-side attention.
The project further demonstrates the diversity of opportunities promised by the boom across Saudi financing, including in microstructure. Those were further boosted by Saudi's September addition to the JP Morgan EM Bond Index watchlist, which by itself augurs a projected $5 billion in new capital inflows,.
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