Malaysia leads global sukuk issuance in 1H2026
Source: Middle East Insurance Review | Sep 2026
Sukuk issuance will continue to be driven primarily by local currency markets, particularly Malaysia, whose strong performance over the first half of 2026 offset a 9% decline in Gulf Cooperation Council issuance prompted by the Middle East war, says S&P Global Ratings (S&P).
The first half of 2026 saw a total sukuk issuance of $129bn, up from $112.3bn during the corresponding period in 2025. The global sukuk market was buffeted by volatility during the first half of 2026. Total issuance volumes continued to trend upward, with local currency issuances increasing by $18.6bn to $87.6bn by 30 June 2026, while foreign currency (FX) denominated issuances fell by $1.9bn to $41.4bn at the same date.
The FX market contraction might have been more pronounced without a $7.3bn increase in Malaysian FX issuances. This increase, led by the International Islamic Liquidity Management Corporation (IILM), was driven by strong demand for short-term, Shariah-compliant liquid instruments amid global volatility and partially offset a cumulative $11.3bn decline in Gulf Cooperation Council (GCC) issuance volumes. Overall, S&P expects global sukuk issuance to expand modestly in 2026, supported by robust local currency activity in Malaysia. M