Saudi sukuk inclusion in JPMorgan index to boost local debt market

By Staff Writer

Saudi Arabia's local currency debt market could deepen further as its riyal-denominated government sukuk are set to join the JPMorgan GBI-EM index series starting in 2027, Fitch said.

The kingdom has by far the largest bourse in the GCC, with the Saudi Exchange accounting for approximately 63% of total GCC market capitalisation as of September 2026, well above the Abu Dhabi Securities Exchange (ADX) at 18% and the Dubai Financial Market (7%).

Starting January 29, 2027, the premier global benchmark for emerging market local-currency debt will formally include the riyal-denominated Islamic sovereign bonds issued by the Saudi Ministry of Finance or National Debt Centre.

“Inclusion of Saudi Arabia’s riyal-denominated government sukuk… should attract further foreign investment,” the ratings agency said.

Even prior to the inclusion and despite regional market volatilities, the ratings agency noted that Saudi Arabia has already seen growing foreign investor interest.

During the first half of 2026, 15% of all new Saudi sovereign debt issued was purchased by foreign investors, up from 8% in the first quarter of the year and 12% in 2025.

In the equity market, 12.7% of the stocks available for public trading on the Saudi bourse were owned by foreign investors by the end of August 2026, up slightly from 12.4% at the end of 2025.

Foreign investor participation is expected to broaden further with the removal of the Qualified Foreign Investor framework in February 2026, Fitch said.

(Writing by Cleofe Maceda; editing by Seban Scaria)

(seban.scaria@lseg.com)