The global sukuk market has recorded remarkable growth in the third quarter of 2025, with Fitch Ratings reporting a 21% year-on-year increase in rated sukuk volumes, reaching a historic $231 billion. This marks the most active third quarter ever for sukuk issuance, reflecting sustained investor interest and robust market dynamics in the Islamic finance sector.
According to Fitch’s Global Sukuk Monitor for Q3 2025, the surge in sukuk issuance has been driven by steady sovereign and corporate activity, combined with investor preference for investment-grade instruments. Investment-grade sukuk now account for nearly 80% of all rated issues, highlighting a market that prioritizes quality and stability.
Credit quality across the sukuk market remains solid. Fitch notes that 88% of rated sukuk issuers carry Stable Outlooks, while 6% are Negative, 3% Positive, and 3% unrated. The majority of sukuk are rated ‘A’ (40%), followed by ‘BBB’ (24%) and ‘BB’ (14%), with no defaults, fallen angels, or rising stars reported so far in 2025.
Most sukuk continue to be senior unsecured, accounting for 97% of outstanding instruments. However, subordinated sukuk are gradually increasing, particularly among banks seeking diversified funding and regulatory capital solutions. By the end of September 2025, 275 sukuk were outstanding, supported by 98 active sukuk programmes.
The issuance profile remains dominated by medium-term instruments with tenors of three to ten years, representing 82% of the market. Long-term sukuk (over ten years) constitute 11%, while short-term instruments under three years make up just 7%. About one-third of rated sukuk are due to mature by 2027, while the remaining 73% will mature in 2028 or later, indicating a long-term orientation among issuers and investors.
In terms of currency, the US dollar continues to dominate global sukuk issuance, accounting for 92.7% of total volumes. The Malaysian ringgit follows with 5.4%, while other currencies including the euro, dirham, and rupiah make up the balance. Structurally, nearly all sukuk carry fixed rates and feature bullet repayment schedules, demonstrating a global investor preference for predictable, standardized instruments.
Regionally, the Middle East maintains its leadership with a 70.6% market share, followed by Asia at 20.4%, Europe at 7.8%, Africa at 0.9%, and North America at 0.3%. Sovereigns and supranationals dominate issuance at 54%, while financial institutions and corporates each contribute 16%. Infrastructure and international public finance sukuk account for 4% and 8%, respectively. Saudi Arabia remains the largest single market at 33% of global Fitch-rated sukuk, followed by the UAE (15%), Indonesia (11%), Malaysia (8%), and Türkiye (8%).
Fitch also reports a rising trend in ESG-compliant sukuk, which now represent 12% of rated volumes, approximately $27 billion. Demand for these instruments is primarily led by sovereign and quasi-sovereign issuers in the GCC and Southeast Asia, and ESG sukuk are expected to continue driving growth in the Islamic finance sector.
Looking ahead, Fitch anticipates that full-year sukuk issuance for 2025 will surpass 2024 levels and that the momentum will extend into 2026. Positive pricing trends, investor diversification, and regulatory support for Islamic finance instruments are expected to sustain market expansion and strengthen the global sukuk ecosystem.
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