The latest report by IMARC Group, titled “Sukuk Market Report by Sukuk Type (Murabahah Sukuk, Salam Sukuk, Istisna Sukuk, Ijarah Sukuk, Musharakah Sukuk, Mudarabah Sukuk, Hybrid Sukuk, and Others), Currency (Turkish Lira, Indonesian Rupiah, Saudi Riyal, Kuwaiti Dinar, Malaysian Ringgit, United States Dollar, and Others), Issuer Type (Sovereign, Corporate, Financial Institutions, Quasi-Sovereign, and Others), and Region 2024-2032”, offers a comprehensive analysis of the industry, which comprises insights on the market.

What is the market size of Sukuk?

The global sukuk market size reached US$ 1,063.3 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 3,619.3 Billion by 2032, exhibiting a growth rate (CAGR) of 14.1% during 2024-2032.

Top Companies in the Sukuk Industry:

• Abu Dhabi Islamic Bank PJSC
• Al Baraka Banking Group
• Al-Rajhi Bank
• Banque Saudi Fransi
• Dubai Islamic Bank
• HSBC Holdings Plc
• Kuwait Finance House
• Malayan Banking Berhad
• Qatar International Islamic Bank
• RHB Bank Berhad
• Samba Financial Group

Factors Affecting the Growth of the Sukuk Industry:

• Infrastructure Investment Needs:

The rising demand for infrastructure development, particularly in emerging economies and growing markets, is a significant catalyst for the issuance of sukuk, which is an Islamic financial certificate like bonds. These regions face substantial challenges in financing the expansion or upgrading of their infrastructure, which is crucial for economic development and societal progress. Sukuk is an ideal solution, aligning with Islamic finance principles, which prohibit interest and promote asset-backed financing and risk-sharing. Also, utilizing sukuk to fund infrastructure projects such as roads, bridges, hospitals, and schools offers a tangible investment that yields returns and also contributes to the public good, resonating with the ethical investment criteria valued in Islamic finance.

• Various Innovation:

Innovations in sukuk structures and offerings are pivotal in broadening the market's horizon and attracting numerous investors and issuers. As the financial market evolves, so does the spectrum of sukuk products, encompassing variations such as green sukuk, which are designated for financing environmentally sustainable projects, and social impact sukuk, aimed at projects with significant positive social outcomes. These innovations are financial tools and are reflections of a growing consciousness toward responsible investing and the global shift toward sustainability. For instance, green sukuk represents a convergence of Islamic finance principles with global environmental goals, offering a Sharia-compliant investment avenue to fund renewable energy projects, green buildings, and sustainable water management systems.

• Finance Awareness and Education:

The expansion of the sukuk market is linked to the level of awareness and understanding of Islamic finance principles among investors, issuaries, and the general public. Additionally, education and awareness campaigns are essential in demystifying Islamic finance, highlighting its ethical foundations, risk-sharing features, and the potential for socio-economic development. As more individuals gain insight into the workings and benefits of Islamic financial products, the appeal of sukuk as an investment vehicle is likely to grow. Besides this, educational initiatives can bridge the knowledge gap, fostering a more informed investor base that appreciates the value proposition offered by sukuk, including their ethical investment criteria, potential for stable returns, and the promotion of financial inclusion and economic development.

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Sukuk Market Report Segmentation:

By Type:

• Murabahah Sukuk
• Salam Sukuk
• Istisna Sukuk
• Ijarah Sukuk
• Musharakah Sukuk
• Mudarabah Sukuk
• Hybrid Sukuk
• Others

Murabahah sukuk accounts for the largest market share due to its popularity among investors seeking Sharia-compliant fixed-income products with tangible underlying assets.

By Currency: 

• Turkish Lira
• Indonesian Rupiah
• Saudi Riyal
• Kuwaiti Dinar
• Malaysian Ringgit
• United States Dollar
• Others

Malaysian ringgit dominates the market due to Malaysia's robust Islamic finance ecosystem and regulatory framework supporting sukuk issuance.

By Issuer Type:

• Sovereign
• Corporate
• Financial Institutions
• Quasi-Sovereign
• Others

Sovereign entities represent the largest segment driven by governments' preference for sukuk to fund infrastructure projects and budget deficits.

Regional Insight:

• North America (United States, Canada)
• Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, Others)
• Europe (Germany, France, United Kingdom, Italy, Spain, Russia, Others)
• Latin America (Brazil, Mexico, Others)
• Middle East and Africa

South East Asia’s dominance in the sukuk market is attributed to the region's strong Islamic finance infrastructure, supportive regulatory environment, and growing demand for Sharia-compliant investment instruments.

Global Sukuk Market Trends:

At present, Sukuk issuance is steadily increasing in terms of volume and diversity. Sovereigns, corporations, and financial institutions had been tapping into the sukuk market for funding needs due to the strong demand from investors seeking Sharia-compliant assets. Moreover, the growing emphasis on sustainable finance is escalating the demand for green and social sukuk issuance. These instruments are used to fund environmentally friendly or socially responsible projects, aligning with the principles of Islamic finance, which promote ethical and socially responsible investments. Furthermore, fintech innovations are facilitating issuance, trading, and settlement processes. For instance, blockchain technology has the potential to enhance transparency, efficiency, and liquidity in the sukuk market.

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