RIYADH: Outstanding Fitch-rated hard-currency sukuk exceeded $221 billion at the end of the first half of 2026, rising 13 percent from a year earlier, as the Islamic debt market remained resilient despite geopolitical and macroeconomic volatility. 

About 82 percent of Fitch-rated listed hard-currency sukuk were investment grade at the end of June, while most issuers had Stable Outlooks and there were no defaults during the period, Fitch Ratings said in a report. 

The increase highlights the continued importance of sukuk as a funding tool for governments and companies across the Gulf and other emerging markets. Saudi Arabia and other major issuers have increasingly tapped international investors through US dollar-denominated sukuk, helping deepen the asset class and strengthen its role in global Islamic finance markets. 

In its latest report, Fitch stated: “The outlook for global sukuk issuance remains sensitive to geopolitical developments. Any renewed escalation in regional tensions could weigh on investor sentiment, growth and issuance activity.”  

It added: “Even so, the listed HC sukuk universe remains supported by strong credit quality and broad access to international listing venues.”  

Earlier this month, Fitch, in a separate report, said that the liquidity of most Fitch-rated sukuk had moved closer to January’s pre-war levels despite ongoing geopolitical tensions in the Middle East, with average liquidity in August at its highest level since the conflict began.  

That report noted that, as of Aug. 4, just over 75 percent of Fitch-rated sukuk had a liquidity score above 50, up from 64 percent on March 23 but still below the 81 percent recorded in January. The median liquidity score stood at 64, up from a trough of 55 on March 23, but remained below the pre-war level of 68. 

Investment-grade market 

Fitch said more than 30 percent of outstanding hard-currency sukuk were listed on at least two exchanges at the end of the first half, while the agency rated about 72 percent of the global listed hard-currency sukuk universe. 

The London Stock Exchange remained the leading venue for listed hard-currency sukuk at the end of the first half, followed by Euronext Dublin, the Frankfurt Stock Exchange, Boerse Stuttgart and Nasdaq Dubai, according to Fitch. 

On the London Stock Exchange, Fitch rates about 80 percent of listed hard-currency sukuk. Of those rated by Fitch, about 84 percent were investment grade, while approximately 89 percent had Stable Outlooks. 

On Nasdaq Dubai, Fitch’s coverage was around 80 percent of listed hard-currency sukuk, with 91 percent of rated listed sukuk investment grade. 

On Euronext Dublin, coverage was about 72 percent, of which 74 percent was investment grade, while on the Frankfurt Stock Exchange it was 67 percent, of which about 78 percent was investment grade.  

Listed hard-currency sukuk across the main venues therefore generally maintained strong credit quality, although rating profiles vary by exchange and issuer mix. 

Environmental, Social and Governance hard-currency sukuk also remained concentrated on a limited number of exchanges, mainly the LSE, Frankfurt Stock Exchange, Boerse Stuttgart and Nasdaq Dubai.  

Fitch rates a significant share of these instruments, ranging from 59 percent on the LSE to 100 percent on Nasdaq Dubai. About 95 percent of Fitch-rated ESG hard-currency sukuk were investment grade at the end of the first half.  

Saudi dominates LSE 

The LSE’s leading position reflects its deep international investor base and established sukuk platform. At the end of the first half, nearly 95 percent of sukuk listed on the LSE originated from the Middle East, mainly the Gulf Cooperation Council, with Saudi Arabia accounting for close to 60 percent. 

Sovereigns and supranationals represented 34 percent of listed sukuk, followed by corporates at 26 percent and financial institutions at 20 percent. Sukuk also accounted for about 11 percent of US dollar debt issuance listings on the LSE in the first half, according to Bloomberg data cited by Fitch.  

According to Fitch, sukuk remained an important funding instrument in emerging markets in the first half, accounting for about 9.3 percent of all emerging-market US dollar debt issued, excluding China. Malaysia, Saudi Arabia, Indonesia and Turkiye remained among the largest sukuk issuers globally. 

The report added that exchanges in these markets continue to focus mainly on local-currency sukuk and have yet to attract meaningful non-domestic hard-currency issuance.