Global sukuk market hits $210 billion

August 7, 2025 (MLN): The global sukuk market has demonstrated robust credit fundamentals, with approximately 80% of Fitch-rated sukuk maintaining investment-grade status with no defaults and  surpassed USD210 billion as of the end of the first half of 2025, according to the report by Fitch Ratings.

Fitch currently rates more than 255 sukuk and 95 sukuk programmes, accounting for over 70% of the outstanding global US dollar-denominated sukuk market.

The total value of Fitch-rated sukuk surpassed USD210bn by the end of 1H25 which marked a 16% increase YoY.

This growth shows strong demand for Islamic finance instruments across regions and sectors.

“Most Fitch-rated sukuk rank senior unsecured and hold international long-term ratings, with about 87% of sukuk issuers having a Stable Outlook,” said Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings.

“Over 90% of rated sukuk are US dollar-denominated and are largely characterised by bullet and fixed-rate structures. Medium-term sukuk with tenors between 3 to 10 years dominate, comprising over 81% of all rated sukuk,” he further added.

Sukuk rated in the A category represent the largest share at 39%, followed by BBB at 25% and BB at 13%.

About 11% of all rated sukuk are considered long-term, with maturities exceeding 10 years, while only 7% have tenors shorter than three years. The majority are expected to mature by 2030.

Environmental, social and governance (ESG) sukuk have also gained traction.These instruments now represent 12% of all Fitch-rated sukuk, equivalent to USD25bn.

Many of these ESG sukuk are dual-listed on leading international exchanges such as the London Stock Exchange, Nasdaq Dubai, and Euronext.

Regional and sectoral diversification in the sukuk market has improved, although the Middle East continues to dominate with a 69.9% share of rated sukuk.Asia accounts for 21.6%, while Europe contributes 7.3%. Sovereign and supranational issuers represent more than half of the rated sukuk market.

However, issuers from financial institutions, corporates, infrastructure, structured finance (ABS), and international public finance are increasingly represented, contributing to the market’s depth and resilience.

While the US dollar remains the dominant issuance currency, accounting for over 90% of rated sukuk, approximately 6.2% are denominated in Malaysian ringgit, further emphasizing the growing geographic and currency diversification in the global sukuk landscape.

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