According to a report by TechSci Research titled, "Global Sukuk Market – Industry Size, Share, Trends, Competition Forecast & Opportunities, 2030," the global sukuk market was valued at USD 1.13 billion in 2024 and is projected to reach USD 2.33 billion by 2030, growing at a CAGR of 12.8% during the forecast period. This significant growth is attributed to the rising popularity of Islamic finance, the diversification of issuers, and increasing global investor interest. Moreover, sukuk structures are evolving to incorporate sustainable and green finance elements, further attracting socially responsible investors.

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Sukuk, a Shariah-compliant financial instrument, plays a crucial role in fulfilling the financing needs of governments, corporations, and financial institutions worldwide. The diversification of sukuk structures, increased participation from non-Muslim-majority countries, and regulatory advancements are driving the global sukuk market to new heights. The integration of technology, such as blockchain and Islamic fintech, is also reshaping the sukuk landscape, making it more transparent and efficient.

Emerging Trends Driving Market Growth

1. Rise of Green and Sustainable Sukuk

The global shift toward sustainability and responsible investing has fueled the emergence of green and sustainable sukuk. Issuers are incorporating environmental, social, and governance (ESG) considerations into their sukuk offerings to meet the growing demand from ethical investors. These sukuk structures align with the principles of responsible investing by financing projects with positive environmental and societal impacts, such as renewable energy, clean water, and sustainable infrastructure.

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2. Integration of Islamic Fintech in Sukuk Issuance

Islamic fintech is revolutionizing the sukuk market by introducing blockchain-based platforms for sukuk issuance, trading, and compliance management. Blockchain technology enhances transparency, reduces operational inefficiencies, and ensures adherence to Shariah principles. Moreover, smart contracts embedded in blockchain platforms streamline sukuk issuance processes, attracting more issuers and investors to the market.

3. Cross-Border Sukuk Issuances on the Rise

The globalization of the sukuk market has led to an increase in cross-border sukuk issuances. Non-Muslim-majority countries such as the United Kingdom, Hong Kong, and Luxembourg have actively participated in sukuk issuance to diversify their financing portfolios. This trend highlights the growing acceptance of sukuk as a mainstream financial instrument across different regions.

4. Enhanced Regulatory Frameworks and Standardization

Efforts by regulatory bodies such as the International Islamic Financial Market (IIFM) and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) are fostering standardization and consistency in sukuk structures. Standardized documentation and regulatory clarity attract global investors and issuers, contributing to market maturity and increased liquidity.

5. Increased Participation from Corporate and Quasi-Sovereign Entities

While sovereign sukuk has traditionally dominated the market, corporate and quasi-sovereign entities are increasingly issuing sukuk to diversify their funding sources. Corporate sukuk issuances offer attractive returns and provide an avenue for companies to align their financing with ethical and Shariah-compliant principles.

Key Market Drivers

1. Rising Global Popularity of Islamic Finance

The global surge in demand for Islamic finance principles is a primary driver of the sukuk market's expansion. Investors seeking ethical and socially responsible investment avenues are increasingly drawn to sukuk, reflecting a broader global trend toward incorporating ethical considerations into financial portfolios. This trend extends beyond Islamic finance hubs, with Western countries recognizing the potential of sukuk as a sustainable financing tool.

2. Diversification of Issuers Across Sectors

The sukuk market has witnessed a diversification of issuers, with corporations, financial institutions, and government entities issuing sukuk to meet their funding needs. This broadening base of issuers enhances market depth, making sukuk a versatile and resilient financial instrument that appeals to a diverse range of investors.

3. Global Investor Interest and Increased Liquidity

Global investors, including sovereign wealth funds, Islamic banks, and institutional investors, are drawn to sukuk for its stability, predictable returns, and adherence to Shariah principles. The increasing participation of non-Muslim-majority countries highlights sukuk's status as a mainstream financial instrument with global significance.

4. Infrastructure Financing and Economic Development

Sukuk has emerged as a preferred financial instrument for infrastructure financing in emerging markets. Governments leverage sukuk to finance critical projects such as transportation, energy, and public utilities, addressing infrastructure gaps and fostering economic development. The alignment of sukuk with sustainable financing practices enhances its appeal for long-term infrastructure funding.

5. Regulatory Support and Favorable Policy Environment

Regulatory frameworks that provide legal clarity and investor protection are essential in promoting sukuk issuance. Countries with strong Islamic finance ecosystems have implemented supportive regulations to facilitate sukuk issuance, ensuring compliance with Shariah principles and enhancing investor confidence.

Future Outlook

The global sukuk market is poised for remarkable growth over the next decade, driven by increasing adoption of Islamic finance, technological advancements, and sustained investor interest. Green and sustainable sukuk will gain further traction as governments and corporations seek to align their financing with ESG objectives. The growing role of blockchain and smart contracts in sukuk issuance will enhance market transparency and efficiency, attracting a broader investor base.

Moreover, continued efforts toward standardization and regulatory harmonization will reduce complexities associated with sukuk structures, further driving market expansion. The rise of cross-border sukuk issuances and participation from non-Muslim-majority regions will elevate sukuk's status as a globally accepted financial instrument.

10 Benefits of the Research Report

1. Comprehensive Market Insights:

   • Gain a deep understanding of the market size, structure, and future growth potential.

2. Identification of Emerging Trends:

   • Discover key trends shaping the global sukuk market and their implications.

3. Regulatory and Compliance Analysis:

   • Analyze the impact of evolving regulatory frameworks on sukuk issuance and market growth.

4. Competitive Landscape Assessment:

   • Evaluate major players and their strategies to maintain market dominance.

5. Evaluation of Investor Preferences:

   • Assess changing investor preferences and their impact on sukuk structures.

6. Technological Impact Analysis:

   • Explore how blockchain, AI, and Islamic fintech are transforming the sukuk market.

7. Opportunities for New Issuers:

   • Identify potential sectors and regions with high growth opportunities for sukuk issuance.

8. Risk Mitigation Insights:

   • Assess the role of sukuk in mitigating financial and operational risks.

9. Cross-Border Issuance Trends:

   • Analyze the rise of international sukuk issuances and their impact on market liquidity.

10. Strategic Recommendations for Stakeholders:

    • Receive actionable insights to make informed decisions and capitalize on emerging opportunities.

11. Download Free Sample Report

    Customers can also request for 10% free customization on this report.

Competitive Analysis

Major Players in the Global Sukuk Market

1. Abu Dhabi Islamic Bank PJSC

   • A leading institution offering a wide range of Shariah-compliant financial products, including sukuk.

2. Al Baraka Banking Group

   • A pioneer in Islamic finance, facilitating sukuk issuances across multiple jurisdictions.

3. Al-Rajhi Bank

   • One of the largest Islamic banks globally, actively involved in sukuk issuance and structuring.

4. Banque Saudi Fransi

   • A prominent player in the Saudi sukuk market, offering innovative Islamic financial solutions.

5. Dubai Islamic Bank

   • A key issuer and facilitator of sukuk, contributing significantly to Dubai's Islamic finance ecosystem.

6. HSBC Holdings Plc

   • A global financial powerhouse actively participating in cross-border sukuk issuances.

7. Kuwait Finance House

   • A major player in the Islamic finance sector, supporting sukuk issuance and development.

8. Malayan Banking Berhad (Maybank)

   • A leading financial institution involved in facilitating sukuk transactions across Southeast Asia.

9. Qatar International Islamic Bank

   • Recognized for its strong presence in the Gulf sukuk market, driving growth and innovation.

10. RHB Bank Berhad

    • A key participant in the Malaysian sukuk market, offering diversified sukuk structures.

Competitive Landscape and Strategic Initiatives

The global sukuk market is highly competitive, with key players focusing on digital transformation, product innovation, and strategic partnerships. Leading financial institutions are leveraging blockchain technology and AI to streamline sukuk issuance and compliance processes. Moreover, cross-border collaborations and innovative sukuk structures are enhancing market liquidity and attracting a wider investor base.

Conclusion

The global sukuk market is experiencing unprecedented growth, driven by rising demand for ethical and Shariah-compliant financial instruments. As technology reshapes the sukuk ecosystem and sustainability becomes a central focus, the market is set to witness further innovation and expansion. With increasing participation from diverse issuers and global investors, sukuk is firmly positioned as a mainstream financial instrument with long-term growth potential.

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