Global Sukuk Surpass $221 Billion at End of First Half
Waleed Mansour: The value of outstanding hard-currency sukuk rated by Fitch Ratings exceeded $221 billion at the end of the first half of 2026, representing a 13% increase compared to the previous year. This growth underscores the continued resilience of the Islamic debt instruments market despite geopolitical and broader economic volatility.
In a report, Fitch Ratings stated that approximately 82% of the listed hard-currency sukuk rated by the agency were investment-grade at the end of June. Future outlooks for most issuers remained stable, with no defaults recorded during the period.
The increase highlights the ongoing importance of sukuk as a financing tool for governments and corporations in the Gulf region and other emerging markets. Saudi Arabia and other major issuers have increasingly turned to international investors through US dollar-denominated sukuk, contributing to the deepening of this asset class and strengthening its role in global Islamic finance markets.
Fitch noted that global sukuk issuance forecasts remain sensitive to geopolitical developments, warning that any renewed escalation in regional tensions could negatively impact investor sentiment, growth, and issuance activity. The agency added that the market for listed hard-currency sukuk continues to be supported by strong credit quality and broad access to international listing platforms.
**Sukuk Liquidity**
In a separate report issued earlier this month, Fitch said that the liquidity of most sukuk rated by the agency had approached pre-war January levels, despite ongoing geopolitical tensions in the Middle East. Average liquidity in August reached its highest level since the conflict began.
As of August 4, slightly more than 75% of Fitch-rated sukuk enjoyed a liquidity score above 50, compared to 64% on March 23, though this remained below the 81% recorded in January. The average liquidity score stood at 64, up from a low of 55 on March 23, but still below the pre-war level of 68.
**Credit Quality**
Fitch stated that more than 30% of outstanding hard-currency sukuk were listed on at least two exchanges by the end of the first half. The agency rates approximately 72% of the total global listed hard-currency sukuk.
The London Stock Exchange remained the leading platform for listed hard-currency sukuk at the end of the first half, followed by Euronext Dublin, then the Frankfurt and Stuttgart Stock Exchanges, and Nasdaq Dubai.
On the London Stock Exchange, Fitch rates approximately 80% of listed hard-currency sukuk, with about 84% of them rated investment-grade. The future outlook for roughly 89% of these sukuk was stable.
On Nasdaq Dubai, Fitch’s coverage reached approximately 80% of listed hard-currency sukuk, with 91% of the rated sukuk classified as investment-grade. In Euronext Dublin, coverage stood at around 72%, with 74% rated investment-grade. Coverage on the Frankfurt Stock Exchange reached 67%, with approximately 78% rated investment-grade.
Hard-currency sukuk linked to Environmental, Social, and Governance (ESG) criteria remained concentrated in a limited number of exchanges, primarily London, Frankfurt, Stuttgart, and Nasdaq Dubai. Approximately 95% of these Fitch-rated sukuk were investment-grade at the end of the first half.
**Saudi Dominance**
The leading position of the London Stock Exchange reflects its broad base of international investors and its established platform for sukuk. At the end of the first half, approximately 95% of sukuk listed on the London Stock Exchange originated from the Middle East, primarily the Gulf Cooperation Council (GCC) countries, with Saudi Arabia accounting for nearly 60%.
Sovereign and supra-sovereign entities accounted for 34% of listed sukuk, followed by corporations at 26%, and financial institutions at 20%. According to Bloomberg data cited by Fitch, sukuk represented about 11% of US dollar-denominated debt issuances listed on the London Stock Exchange during the first half.
**Emerging Markets**
According to Fitch, sukuk remained an important financing tool in emerging markets during the first half, accounting for approximately 9.3% of total US dollar-denominated debt issued in emerging markets, excluding China.
Malaysia, Saudi Arabia, Indonesia, and Turkey remained among the largest global sukuk issuers. The report noted that exchanges in these markets still focus primarily on local-currency sukuk and have not yet succeeded in attracting large volumes of hard-currency sukuk issuances from foreign entities.
