Global sukuk issuance is expected to decline in the third quarter of 2025 due to seasonal summer trends in core issuing markets, following a strong first half in which global volumes surpassed $1 trillion for the first time, according to Fitch Ratings.
In its latest Global Sukuk Monitor, Fitch noted that 80% of Fitch-rated sukuk are investment grade, and 87% of issuers carry a Stable Outlook, indicating that the asset class remains resilient despite ongoing geopolitical tensions in the Middle East.
Issuance recovered quickly after a brief pause in early 2025, driven by easing regional tensions. Bashar Al Natoor, Global Head of Islamic Finance at Fitch, said activity is likely to rebound again in the fourth quarter, supported by Islamic investor demand, refinancing needs, fiscal requirements, and policy support for Islamic finance.
Fitch also noted regulatory developments that could support future issuance. The UAE Central Bank’s Higher Sharia Authority issued a resolution allowing the sale of rights over tangible assets without requiring asset registration. Ras Al Khaimah’s recent sukuk, rated A+, also received a registration exemption for real-estate ijara assets, reinforcing flexibility in structuring.
The Accounting and Auditing Organization for Islamic Financial Institutions is revising Sharia Standard No. 62, and some regulators have already moved to address sukuk asset registration frameworks.
Sukuk penetration in emerging markets rose to over 16.5% of US dollar-denominated debt issued in Q2, up from 12% in 2024, excluding China. Notable issuances during the first half included the largest-ever AA-rated corporate sukuk by ADNOC Murban RSC, Egypt’s return to the sukuk market (rated B), and Jordan’s debut dollar-denominated sovereign sukuk.
GCC banks continue to play a central role as both issuers and investors, benefiting from strong liquidity positions. Several UAE banks have begun offering fractional sukuk to expand retail access.
Fitch expects lower oil prices, forecast at $70 per barrel in 2025 and $65 in 2026, to spur debt issuance across the Gulf. An anticipated US Federal Reserve rate cut in Q4 2025, from 4.5% to 4.25%, could also support issuance volumes. Risks to the outlook include geopolitical escalation, new Sharia compliance requirements, and oil market volatility.Global sukuk issuance is expected to decline in the third quarter of 2025 due to seasonal summer trends in core issuing markets, following a strong first half in which global volumes surpassed $1 trillion for the first time, according to Fitch Ratings.
In its latest Global Sukuk Monitor, Fitch noted that 80% of Fitch-rated sukuk are investment grade, and 87% of issuers carry a Stable Outlook, indicating that the asset class remains resilient despite ongoing geopolitical tensions in the Middle East.
Issuance recovered quickly after a brief pause in early 2025, driven by easing regional tensions. Bashar Al Natoor, Global Head of Islamic Finance at Fitch, said activity is likely to rebound again in the fourth quarter, supported by Islamic investor demand, refinancing needs, fiscal requirements, and policy support for Islamic finance.
Fitch also noted regulatory developments that could support future issuance. The UAE Central Bank’s Higher Sharia Authority issued a resolution allowing the sale of rights over tangible assets without requiring asset registration. Ras Al Khaimah’s recent sukuk, rated A+, also received a registration exemption for real-estate ijara assets, reinforcing flexibility in structuring.
The Accounting and Auditing Organization for Islamic Financial Institutions is revising Sharia Standard No. 62, and some regulators have already moved to address sukuk asset registration frameworks.
Sukuk penetration in emerging markets rose to over 16.5% of US dollar-denominated debt issued in Q2, up from 12% in 2024, excluding China. Notable issuances during the first half included the largest-ever AA-rated corporate sukuk by ADNOC Murban RSC, Egypt’s return to the sukuk market (rated B), and Jordan’s debut dollar-denominated sovereign sukuk.
GCC banks continue to play a central role as both issuers and investors, benefiting from strong liquidity positions. Several UAE banks have begun offering fractional sukuk to expand retail access.
Fitch expects lower oil prices, forecast at $70 per barrel in 2025 and $65 in 2026, to spur debt issuance across the Gulf. An anticipated US Federal Reserve rate cut in Q4 2025, from 4.5% to 4.25%, could also support issuance volumes. Risks to the outlook include geopolitical escalation, new Sharia compliance requirements, and oil market volatility.
