The UAE, Saudi Arabia, and Malaysia are set to remain the most active sukuk issuers in 2024, Fitch said in a release. Malaysia currently sits as the world’s biggest sukuk market, with some 60% of its MYR-denominated debt issued as sukuk, according to Fitch.

The size of the market: The GCC’s debt capital markets are rapidly approaching the USD 1 tn mark after reaching USD 940 bn during 1Q 2024, with sukuk constituting 37% of the total GCC debt capital market at the end of the quarter. GCC banks also exceeded their 2023 USD denominated debt issuance during 1Q 2024, with sukuk accounting for 51%.

Outlook: Sukuk issuances are expected to grow, albeit at a slower pace than in 1Q, driven by financing needs, economic diversification, and low interest rates, according to the rating agency, Asharq Business reports. Other risks include new Sharia requirements, changes in sukuk credit risks, geopolitical uncertainties and oil price hikes.

On a global scale: Outstanding sukuk reached USD 867 bn towards the end of 1Q 2024, according to Fitch estimates, with the GCC, Malaysia, Indonesia, Turkey, and Pakistan issuing around USD 56.8 bn worth of sukuk in various currencies.

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