MENA Sukuk Market Soars 48% to $6.2 Billion

MENA Sukuk Market Soars 48% to $6.2 Billion

The Middle East and North Africa (MENA) region is experiencing a boom in Islamic finance. Fueling this growth is a 48% surge in Sukuk issuance, reaching $6.2 billion in the first half of 2024. This rise is driven by growing demand for Sharia-compliant investments, particularly in green and social projects.

Aligning with a Global Trend

This trend reflects a broader shift towards sustainable finance globally. Sukuk, Islamic bonds that comply with Islamic principles, offer an ethical alternative to conventional bonds. In fact, they play a crucial role in funding infrastructure development, eco-friendly initiatives, and social programs.

Key Takeaways:

  • MENA Sukuk Market Booms: Green and social projects drive the growth, with issuance nearly doubling compared to the first half of 2023.
  • ESG Focus: The Islamic financial sector prioritizes Environmental, Social, and Governance (ESG) investing, aligning with the UAE’s recent climate finance announcements at COP28.
  • Saudi Arabia Leads: The Kingdom issued the most Sukuk in the region, totaling $3.98 billion.
  • Banks Join In: Emirates Islamic Bank’s debut issuance of $750 million highlights growing bank participation.

Looking Ahead: Continued Growth Expected

Experts predict continued growth for the MENA Sukuk market, fueled by several factors. One key driver is the strong demand for sustainable investments, with investors showing a growing appetite for ESG-focused Sukuk.

Additionally, GCC countries’ efforts to diversify their economies will create new funding needs. Furthermore, a robust debt capital market will further support Sukuk issuance.

This positive outlook signifies a growing commitment to sustainable finance in the MENA region, offering ethical and impactful investment opportunities.

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