Ministry of Finance and The National Debt Management Center signed on Sunday, August 15, 2021, an agreement with AlRajhi Bank to appoint AlRajhi as a primary dealer in government local debt securities at the Ministry's headquarters in Riyadh, to join Alinma Bank, Bank Al-Jazira, Saudi National Bank, and Saudi British Bank (SABB), previously appointed as primary dealers.
The agreement was signed by H.E. Abdulaziz AlFuraih, Chairman of the Steering Committee at the Ministry of Finance, Mr. Hani AlMedaini, Acting CEO of the National Debt Management Center and Mr. Waleed AlMoqbel, CEO of AlRajhi Bank.
H.E. AlFuraih stated that the signing of this agreement fits within the Financial Sector Development Program (FSDP) strategy as a step towards achieving the objectives of Vision 2030. The agreement will expand the investors base in the primary market to secure the Kingdom's domestic debt financing requirements, support the development of the secondary market by increasing the liquidity of the government local debt securities, and collaborate with the National Debt Management Center on the development of debt capital markets in the Kingdom. His Excellency also pointed that the Ministry of Finance – as part of its strategic mission to support and develop the private sector in line with the Vision 2030 objectives – considers the private sector a fundamental pillar in the development process as the kingdom seeks to support its financial system development.
In addition to enabling financial institutions to support the growth of the private sector in developing an advanced financial market, Mr. Hani AlMedaini, NDMC Acting CEO, emphasized the importance of these agreements with the primary dealers which raise the efficiency of financial transactions in government local debt securities through establishing clear and transparent frameworks for its clients and enhance the collaboration between financial institutions in developing the local debt market which witnessed progressive leaps in trading volumes that reflect the investors trust in local debt securities.
AlRajhi Bank's CEO, Waleed AlMoqbel, praised the financial institutions' consistency with the goals of the Ministry of Finance, and to give AlRajhi Bank the opportunity to contribute to the achievement of Vision 2030 objectives that will aid the development of an advanced financial market and fiscal sustainability in the Kingdom. He hoped that this agreement will achieve its objectives in attaining an advanced financial market that delivers closer integration between government and private sectors.
Moreover, and as the announced Annual Government Borrowing Plan, all the investors' subscription requests in local debt securities are received through the designated primary dealers to be offered to NDMC to announce the issuance.
As for government local debt securities in the secondary market in the Kingdom, the primary dealers take the role of market makers in cooperation with their authorized persons in accordance with the Capital Market Authority's (CMA) regulations.