Albilad Saudi Sovereign Sukuk ETF invests in 17 government sukuk issuances: CEO

Albilad Saudi Sovereign Sukuk ETF invests in 17 domestic sukuk issuances, Zaid Al-Mufreh, Albilad Capital's chief executive officer (CEO), told Argaam in an exclusive.

The fund was listed with SAR 30 million capital, and was floated at SAR 10 per unit to retail and institutional investors.

Albilad Capital successfully listed the fund today, Feb. 17, as the first Saudi sovereign sukuk exchange traded fund (ETF), Al-Mufreh said.

The fund, which mainly invests in government sukuk, offers the first-of-its-kind product in the Middle East.

Albilad Saudi Sovereign Sukuk ETF aims to purchase government issuances, based on certain standards that are evaluated on a monthly basis. These are namely, the issuances shall be Saudi riyal-denominated; the maturity date shall be within three months or more; and the issuance shall be through a market maker or a primary dealer.

In addition, the fund aims to distribute monthly dividends to unit holders, with the minimum subscription limit set at 1 unit.

“The market outlook is bullish, thanks to the latest efforts made under the financial sector development program,” Al-Mufreh noted.

These financial sector developments included appointment of primary dealers - a move that not only boosted market liquidity, but the number of offers as well as demand for issuances.

Several measures have been taken to further strengthen the Saudi market, as the Kingdom joined MSCI Emerging Markets Index.

Tadawul also cut the par value of domestic government debt instruments to SAR 1,000 apiece from SAR 1 million.