Saudi Arabia completes first sec lending transaction

Global custodian HSBC has announced the completion of the first ever securities lending transaction in Saudi Arabia.

The bank acted as custodian and agent lender on the deal which involved borrowing equities from a large regional asset owner to lend to global institutional investors.

HSBC has hailed the transaction as a milestone for Saudi Arabia’s capital markets.

“Saudi Arabia’s opening up of its capital markets to securities lending for the first time not only allows us to help asset owners receive potentially higher returns from their Saudi investments, but also facilitates more liquidity into the market and enhance price discovery,” said Adnan Hussain, global head of agency securities lending at HSBC.

Saudi Arabia only allowed foreign investors to directly access its capital markets in 2015. Since then, it has looked to become more international in keeping with the Saudi Vision 2030 economic reform plan.

A key development was the inclusion of Saudi stocks on the FSTE Russell and MSCI emerging markets indices. The national stock exchange, the Tadawul, is ranked as the tenth biggest in the world with securities valued at US$2.4 trillion.

©2021 funds global mena

Related Articles