KUALA LUMPUR: Malaysia drove global sukuk issuance growth in the first half of 2026 (1H26), with strong local currency issuance offsetting weaker Gulf Cooperation Council (GCC) countries’ issuance, according to S&P Global Ratings.
The ratings agency said in a report that global sukuk issuance reached US$129bil in 1H26, up from US$112.3bil in the same period last year.
S&P maintained its full-year forecast for issuance to rise modestly to between US$270bil and US$280bil.
It said issuance would continue to be driven mainly by local currency markets, particularly Malaysia, where strong growth in 1H26 offset a 9% decline in GCC issuance due to the Middle East conflict.
S&P said sukuk issuance growth had been underpinned by local currency markets, notably in Malaysia, Qatar, Saudi Arabia and Turkiye.
It expected these markets to remain the main growth drivers amid ongoing geopolitical tensions and a more restrictive interest rate environment, which would continue to weigh on foreign currency-denominated issuance.
Looking beyond near-term volatility, the ratings agency maintained a positive medium-term outlook for the sukuk market, supported by the expansion of sustainable finance, regulatory frameworks, tokenisation and other financial technology innovations that could enhance market efficiency. — Bernama
