iBoxx Tadawul SAR Government Sukuk Index
After declining 1.26% in H1 2024, the iBoxx Tadawul SAR Government Sukuk Index posted three consecutive months of gains: up 0.44%, 2.62% and 1.23% in July, August and September, respectively. Overall, the index rose 5.67% in Q3, bringing its YTD return to 4.34% and nearly recovering to its pre-rate hike levels (early 2022). Additionally, with the Saudi riyal pegged to the U.S. dollar, the Saudi Central Bank implemented its first rate cut since the COVID-19 pandemic, following the U.S. Federal Reserve’s 50 bps rate cut in September.
Boosted by the rate cut and declining yields, the 10+ year segment, which is the most sensitive to interest rate changes, performed the best in Q3 (up 9.48%), followed by the 5-10 year segment (up 4.95%) and the 0-5 year segment (up 3.25%). Year-to-date, all maturity segments showed similar performance—the 0-5 year sleeve led (up 5.12%), followed by the 5-10 year segment (up 4.88%) and the 10+ year segment (up 4.47%).
