The global sukuk market has crossed a historic threshold to break the $1 trillion mark in outstanding volume, according to a major report published by the Manama-headquartered International Islamic Financial Market (IIFM).
The 15th annual Sukuk Report, launched yesterday during a virtual webinar featuring international industry experts, reveals that combined international outstanding sukuk ($280.58 billion) and domestic outstanding volume ($734.93bn) reached a record $1.015trn in 2025.
Total global sukuk issuance surged 28.2 per cent year-on-year to hit $262.9bn – the strongest annual growth in years. International issuances led the rebound, expanding 50.8pc to $98.9bn, while domestic issuances rose 17.5pc to $163.9bn.
Sovereign issuances remained the largest single segment at $137.5bn, accounting for 52.3pc of the global total after a 15.6pc gain.
However, quasi-sovereign issuers registered the fastest growth, jumping 66.5pc to a record $52.3bn and capturing nearly a fifth of the market.
Corporate issuances grew 39.4pc to $33.5bn, while Financial Institutions expanded 28.8pc to $39.6bn, pointing to a steadily broadening issuer base.
In structural shifts, Sukuk Al Ijarah became the top structure in the domestic market at $39.8bn (24.28pc), dethroning Sukuk Al Murabahah which historically held the top spot.
In the short-term liquidity market, the International Islamic Liquidity Management Corporation captured 32.1pc of global volume, issuing $22.9bn across 69 transactions.
Cumulative data from 2001 to 2025 shows Malaysia retaining its position as the top global sukuk issuer with $1.08trn (43.69pc), followed by Saudi Arabia at $379.16bn (15.33pc) and Indonesia at $237.93bn (9.62pc).
Commenting, IIFM vice-chairman Affendi Rashdi said: “As Islamic finance enters its next phase of growth, our focus must be on building a more connected, efficient and innovative global ecosystem. By strengthening cross-border Sharia-compliant liquidity flows, advancing tokenised sukuk at scale and continuing to innovate in meeting evolving financing needs, we can unlock greater value and relevance for the global economy.”
IIFM acting CEO Dr Ahmed Rufai highlighted the role of technological innovation and structural clarity in driving the sector forward.
“Addressing the operational differences between asset-backed and asset-based instruments, alongside standardising documentation, remains the cornerstone of building a mature market,” Dr Rufai noted.
“By uniting these legal standards with emerging technologies such as digital tokenisation, we can reduce issuance costs and make sukuk accessible to individual investors.”
Supported by the Central Bank of Bahrain and international regulators, IIFM affirmed that a strong pipeline and ongoing digital standardisation will sustain market growth into 2026.
avinash@gdnmedia.bh
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