A turnaround on global sukuk issuance will rely upon the maintenance of the US-Iran ceasefire and the resulting stability from it, Fitch Ratings said in a recent release.
Rising stability could anchor better funding conditions, with issuers' funding plans and investors' allocation direction to shape the trajectory of the recovery, Fitch said.
Global sukuk issuance in 2026 will be weaker compared to 2025, Fitch's global head of Islamic finance, Bashar Al Natoor, said.
Sukuk issuance declined by 36% in the first half for the Gulf Cooperation Council, Malaysia, Indonesia, Turkey, and Pakistan to $125 billion, driven by volatilities and increasing yields, Fitch said.
The rating agency has not observed any sukuk defaults since 2021, while 80% of its rated sukuk are investment grade.
However, the share of issuers with stable outlooks declined to 80% in the first half of 2026, the analyst said.
Indonesia should see strong near-term issuance amid ongoing funding needs, while a reduction in government debt could narrow sukuk issuance in Malaysia, Fitch said.
Fitch expects a better view on market dynamics after the summer holidays in major sukuk markets.