Saudi Sovereign Bonds Lag Amid Global Volatility

Saudi Arabia’s sovereign USD bonds have underperformed this year, with a modest year-to-date return of 2.7%, trailing the broader emerging markets investment-grade (EM IG) index, which posted a 4.0% gain. Analysts attribute this lag to ongoing global economic uncertainties and fluctuating oil prices. Despite this, experts maintain an optimistic outlook on the kingdom’s bonds, particularly at the long end of the yield curve. Saudi Arabia’s fiscal health remains a point of focus, with bond spreads narrowing slightly compared to the EM IG benchmark.