Sukuk Global Market is Likely to Upsurge $2160.55 Billion at a CAGR of 18.8% Globally By 2028, Size, Share, Trends, Demand, Growth Forecast and Opportunity outlook

Overview and Scope
An Islamic financial certificate is known as a sukuk, also known as an “”Islamic bond or sharia-compliant bond) denotes a percentage of ownership in a portfolio of permissible current or future assets. It is used to raise capital for a firm.

Sizing and Forecast
The sukuk market size has grown rapidly in recent years. It will grow from $904.5 billion in 2023 to $1084.8 billion in 2024 at a compound annual growth rate (CAGR) of 19.9%. The growth in the historic period can be attributed to islamic finance growth, diversification of funding sources, infrastructure development, government initiatives, global sukuk issuance, increased cross-border transactions.

The sukuk market size is expected to see rapid growth in the next few years. It will grow to $2160.55 billion in 2028 at a compound annual growth rate (CAGR) of 18.8%. The growth in the forecast period can be attributed to global economic recovery, belt and road initiative, sustainable and green sukuk, islamic fintech growth, diversity of sukuk structures, wealth management demand. Major trends in the forecast period include innovation in sukuk structures, digitalization of sukuk issuance, enhanced regulatory frameworks, partnerships and cross-border collaboration, private sector participation..

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Segmentation & Regional Insights
The sukuk market covered in this report is segmented –
1) By Sukuk Type: Murabahah Sukuk, Salam Sukuk, Istisna Sukuk, Ijarah Sukuk, Musharakah Sukuk, Mudarabah Sukuk, Hybrid Sukuk, Other Sukuk Types
2) By Currency: Turkish Lira, Indonesian Rupiah, Saudi Riyal, Kuwaiti Dinar, Malaysian Ringgit, United States Dollar, Other Currencies
3) By Issuer Type: Sovereign, Corporate, Financial Institutions, Quasi-Sovereign, Other Issuer Types

Saudi-Arabia was the largest region in the sukuk market in 2023. The regions covered in the sukuk market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa

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Major Driver Impacting Market Growth
The rapid urbanization in Middle Eastern countries is expected to propel the growth of the sukuk market going forward. Urbanization is the process of a nation’s population gradually moving from rural to urban areas, with the proportion of urban residents growing faster than that of rural residents. The demand for infrastructure investment is created by urbanization, which subsequently spurs economic growth through a variety of avenues, such as lowering transaction costs and increasing productivity. In infrastructure development, sukuk is a popular and extremely effective way for governments to raise money locally and internationally through a sharia-compliant procedure without paying interest for the development of the country. For instance, in October 2021, according to the Middle East Institute, a US-based non-profit organization think tank, and cultural center, almost two-thirds of the population of the Middle East lives in cities, above the global total of just over half. Additionally, In July 2022, according to the Brookings Institution, a US-based research institute, in the developed world and middle-income nations in Latin America, Europe, the Middle East, and North Africa, urbanization rates hover at around 70%, and they are rising quickly at other developing economies. Therefore, the rapid urbanization in Middle Eastern countries is driving the growth of the sukuk market.

Key Industry Players
Major companies operating in the Sukuk market are focused on introducing innovative solutions, such as the Sukuk ETF, to drive their revenues in the market. Sukuk ETFs are exchange-traded funds that track the performance of a sukuk index, providing investors with exposure to the sukuk market. For instance, in September 2023, HSBC Asset Management, a UK-based company that offers investment advisory and asset management, launched the HSBC Global Sukuk UCITS (Undertakings for Collective Investment in Transferable Securities) ETF (Exchange Traded Funds), Europe’s first global sukuk ETF. The HSBC Global Sukuk UCITS ETF (HBKU) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.70%. Tracked by HBKU, the FTSE IdealRatings Investment Grade index provides exposure to sukuk, sometimes known as Islamic bonds, globally. With HBKU, HSBC AM can now satisfy the increasing demand for Islamic passive products worldwide, whether those products are used as stand-alone investments or as components of larger multi-asset portfolios that adhere to Shariah.

The sukuk market report table of contents includes:
1. Executive Summary