Unlocking Global Sukuk Market Trends for 2024 - Business

Global Sukuk Issuances Reach Record Levels in 2024

The total volume of sustainable sukuk issuances reached .2 billion during H1 of 2024 , down slightly from the same period last year . Despite this decrease , the global sukuk issuances reached an all - time high of 1.9 billion in the first six months of 2024 , showing a slight increase from the previous year 's 1.3 billion . S&P Global , a renowned credit rating agency , highlighted these figures in its recent report , maintaining its forecast for global sukuk issuance between 60 billion-70 billion for the year.

Unlocking Global Sukuk Market Trends for 2024

 S&P Global states that improved visibility on the medium - term trajectory of interest rates has benefited foreign currency - denominated sukuk issuances . The U.S. Federal Reserve is expected to begin cutting rates in December 2024 , according to the report.

A notable increase of 23.8 percent in foreign currency issuances was reported in the first half of 2024 , reaching 2.7 billion by June 30 , up from 6.4 billion the previous year . Main contributors to this surge in foreign currency issuances were from countries like Saudi Arabia , the UAE , Oman , Malaysia , and Kuwait . These countries are experiencing high financing needs , driving the growth in sukuk issuances.

The adoption of OIFI 's Standard 62 guidelines could potentially disrupt the market , transitioning the industry towards asset - backed sukuk . However , the market is uncertain about the appetite for such instruments and the legal implications of moving assets off balance sheets . This uncertainty could lead to further market fragmentation or a halt in sukuk issuances as structurers seek a middle ground.

 Local currency - denominated sukuk issuances saw a decline of 8.8 percent year - on - year , mainly due to lower issuances in countries like Trkiye , Pakistan , UAE , and Malaysia . The most significant drop was observed in Trkiye , where monetary policy adjustments are rebalancing the economy.

Furthermore , the total volume of sustainable sukuk issuances is expected to hover around 0 billion-2 billion in 2024 . 80 percent of the sustainability sukuk issuances in the first half of 2024 came from GCC banks as they embarked on their climate transition journey . This shows a growing trend towards sustainable finance in Islamic banking and finance .

In conclusion , the global sukuk market is experiencing unprecedented growth , driven by increased foreign currency issuances , evolving regulatory standards , and a shift towards sustainability . The future of sukuk issuances looks promising as markets adapt to changing financial landscapes and investor preferences.