Fitch Ratings reported that the global sukuk markets entered the new year with strong fundamentals, as the instrument will continue to be one of the main sources of funding in the emerging markets following robust issuance of $300 billion in 2025.
The issuance of global sukuk increased by 25 percent in the previous year due to the consistent activity in the Gulf Cooperation Council nations, and the greater involvement of banks, corporates, infrastructure, and project finance issuers.
The ratings agency also noted that the momentum of issuing ratings is estimated to persist in the current year, backed by funding diversification strategies, future maturities, and refinancing needs throughout sovereigns, financial institutions, and corporates.
Sukuk are financial instruments that comply with Shariah principles, which give investors partial rights to the underlying assets of an issuer and act as an alternative to conventional bonds.
However, the report indicated that sukuk issuance in 2025 was characterized by sovereign issuers, and an increase in the activity of banks, corporates, infrastructure, and project finance.
Fitch’s global head of Islamic Finance, Bashar Al-Natoor, said, “We expect global sukuk issuance to sustain momentum in 2026, with continued growth in the core markets and a rising share in EMs (emerging markets) — at about 16 percent of all US dollar debt capital market issuance in 2025 excluding China.”
He stated, “Geopolitical tensions and shifting Sharia standards may pose risks, but fundamentals remain sound, supported by the market’s broadly solid credit profile.”
Therefore, the report indicated that outstanding sukuk in the whole world has exceeded $1 trillion by the year 2025. The highest proportion of debt capital markets outstanding was Sukuk, with 41 percent in the GCC, 16 percent in the ASEAN, and 8 percent in Turkiye.
Approximately 82.5 percent of rated sukuk are investment grade, and 90.5 percent of issuers have Stable Outlooks, and no sukuk default has been experienced within the past four years.
Meanwhile, speaking of global growth, Fitch mentioned that frontier markets in Egypt, Jordan, and Sri Lanka accessed the sukuk market in 2025.
Fitch Ratings added, “Egypt is emerging as a regular issuer, with most 2025 dollar issuance in sukuk format. Algeria, Tunisia, Malta, and the Philippines issued sukuk rules in 2025, paving the way for new market entrants.”
The report observed that the adoption of the Accounting and Auditing Organization of Islamic Financial Institutions’ Shariah Standard 62 is not complete, and new wordings in certain GCC sukuk forms permit trustees to be registered as the titleholder of assets in their name after default.
AAOIFI stated in April 2025 that its Shariah board was revising the proposed Standard 62 following industry feedback, although it did not state a deadline to finalize. Thus, the guideline is meant to standardize all the aspects of the sukuk market, such as asset backing, ownership transfer, and trading process.
