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Frequently Asked Questions

WHAT IS THE IBOXX TADAWUL SAR GOVERNMENT SUKUK & BOND INDEX?

The iBoxx Tadawul SAR Government Sukuk & Bond Index, was developed in collaboration with a world leader in critical information, analytics and solutions IHS Markit and is designed to reflect the performance of Saudi Arabian Riyal (SAR) denominated government bonds including Sukuk issued by Saudi Government. This index is a broad market benchmark.

WHAT IS THE IBOXX TADAWUL SAR GOVERNMENT SUKUK INDEX SERIES?

iBoxx Tadawul SAR Government Sukuk Index Series provides transparency to Saudi local currency Saudi Government Sukuk market performance. It does not include Saudi Arabian Riyal (SAR) denominated government conventional bonds but includes solely Saudi Arabian Riyal (SAR) denominated government Sukuk.

WHO IS IHS MARKIT AND IBOXX?

IHS Markit is a global information provider and leader in fixed income indices and data space. Company was selected by Tadawul to become strategic partner in Fixed Income Indices and data product development.

iBoxx is IHS Markit’s fixed income indices brand, which is globally recognized as a leading brand in fixed income indices space by global fixed income investment community.

WHAT DOES SUKUK/BOND INDICES MEAN AND HOW IT IS DIFFERENT FROM IBOXX TADAWUL SAR GOVERNMENT SUKUK & BOND INDICES?

Sukuk/Bond Indices have been developed by Tadawul only, not in collaboration with IHS Markit as iBoxx Tadawul SAR Government Sukuk Index Series and iBoxx Tadawul SAR Government Sukuk & Bond Index.

Tadawul Sukuk/Bond Indices are designed to reflect the performance and price movements of Saudi Arabia local currency denominated all listed sukuk and bond market. Indices includes all Sukuk and Bonds listed in Saudi Stock Exchange (Tadawul). Indices are calculated using clean prices only, excluding accrued interest. Indices calculated by Tadawul in real time using traded prices obtained from Tadawul’s order book.

Tadawul currently calculated three Indices:
1. Sukuk/Bonds Market Index – includes all Tadawul Listed Sukuk and Bonds. All bond types are eligible including Fixed and Floating rate Sukuks and Bonds.
2. Government Sukuk/Bonds Index - includes all Tadawul Listed Government Sukuk and Bonds. All bond types are eligible including Fixed and Floating rate Sukuks and Bonds.
3. Corporate Sukuk/Bonds Index - includes all Tadawul Listed Corporate Sukuk and Bonds. All bond types are eligible including Fixed and Floating rate Sukuks and Bonds.

All Tadawul Sukuk/Bond Indices are rebalanced on the same day of any corporate action, new issuance or delisting. There is no special treatment of the special intra-month events. Notional amount of the bond is updated on the same day there is a change.

If bonds from the same issuer are funded into one bond, then the notional amount will be adjusted for ISIN, which remains listed and delist ISIN, which does not remain listed.

iBoxx Tadawul SAR Government Sukuk & Bond Index is designed to be a broad market benchmark and act as broad Saudi Government local currency fixed income market barometer.

iBoxx Tadawul SAR Government Sukuk Index Series are designed to be suitable for financial product development, such as ETFs etc. and is calculated using independent Fair Value Pricing method provided by IHS Markit Evaluated Bond Pricing Service (EVB). This method allows to track the performance of daily fair value Sukuk price movements on a daily basis even if Sukuk never been traded or quoted.

iBoxx Tadawul SAR Government Sukuk Index Series includes only Sovereign fixed coupon Sukuk debt issued by the Saudi Arabia government and is divided into maturity sub-indices, that helps to track performance of shorter and longer term Government Sukuks. Minimum Amount outstanding of eligible Sukuks must be at least SAR 100 million.

Indices are rebalanced on quarterly basis (February, May, August and November, last calendar day) as it helps to reduce transaction cost for fund managers who are following this index.

Indices are calculated daily End of Day only and have Clean Price ex accrued interest (CPI) and Total Return, accrued interest is included (TRI) Index levels.

For more details on the iBoxx Tadawul SAR Government Sukuk Index Series Calculation and Sukuk Selection Criteria, please refer to the Index Methodology.

And
For more details on the iBoxx Tadawul SAR Government Sukuk & Bond Index Calculation and Sukuk & Bond Selection Criteria, please refer to the Index Methodology.

WHAT IS MARKIT EVALUATED BOND PRICING SERVICE (EVB)?

The bond prices used to calculate the iBoxx Tadawul SAR Government Sukuk Index series and iBoxx Tadawul SAR Government Sukuk & Bond Index are provided by IHS Markit Evaluated Bond Pricing Service (EVB).

To make sure that illiquid bonds are being priced constantly on a daily basis, EVB is using its independent and proprietary evaluated pricing methodology and the following are the primary inputs into the evaluation process:

1. Trades, including real-time trades and negotiated deals.
2. Primary dealer quotes which are buy and sell quotes for Sukuks.

EVB pricing methodology is based on Yield curve pricing:

  • Saudi SAR Government Sukuk & Bond Yield curve will be derived from liquid traded bonds across the term structure using trades and dealer quotes.
  • Less liquid bonds will be plotted on the yield curve in respect to their maturity and their yield will be derived.
  • Derived yields will be converted to cash prices.

In this methodology, the more liquid bonds data points (trades, dealer quotes) are available, the more accurate the yield curve will be.

WHO ARE THE MAIN POTENTIAL USERS FOR THE IBOXX TADAWUL SAR GOVERNMENT SUKUK & BOND INDICES?

Asset managers, ETF issuers, Hedge funds, Insurers / Pensions, Investment banks, Regulators, Central Banks, Research Houses, Academics.

WHAT ARE MAIN USES FOR THE IBOXX TADAWUL SAR GOVERNMENT SUKUK & BOND INDICES?

Benchmarking, ETF and other structured products issuance, Research, Risk Management.

For more information on use cases please go to Knowledge Center

WHERE THE IBOXX TADAWUL SAR GOVERNMENT SUKUK & BOND INDICES ARE DISPLAYED?

To view iBoxx Tadawul SAR Government Sukuk Index Series Daily End of Day Index Levels please refer to Index Info Page.

To view iBoxx Tadawul SAR Government Sukuk & Bond Index Daily End of Day Index Levels please refer to Index Info Page.

WHAT ARE THE SELECTION CRITERIA USED TO DETERMINE THE INDEX CONSTITUENTS FOR THE IBOXX TADAWUL SAR GOVERNMENT SUKUK & BOND INDICES?

Only SAR-denominated fixed coupon Sovereign Sukuk debt issued by the Saudi Arabia government is eligible for this index. Minimum amount outstanding must be at least SAR 100 million.

For more details on the iBoxx Tadawul SAR Government Sukuk Index Series Calculation and Sukuk Selection Criteria, please refer to the Index Methodology.


For more details on the iBoxx Tadawul SAR Government Sukuk & Bond Index Calculation and Sukuk & Bond Selection Criteria, please refer to the Index Methodology .

WHAT ARE THE BASE DATE AND BASE VALUE OF INDICES?

iBoxx Tadawul SAR Government Sukuk Index - Base date is June 30, 2019 and the base value is 100.

iBoxx Tadawul SAR Government Sukuk & Bond Index - Base date is January 31, 2020 and the base value of 100.