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Sukuk market thrives amid economic uncertainty

Redha Al Ansari
Redha Al Ansari
Head of Islamic Finance Research, London Stock Exchange Group

COVID-19 has had a devastating economic impact all over the globe. However, a report from Refinitiv explores how the sukuk market is buoyant as governments rebuild economies and companies repair balance sheets. 


  1. The sukuk market has flourished through the COVID-19 pandemic and into the third quarter of 2021, largely driven by five sovereign states.
  2. Despite relative illiquidity in secondary markets, forecasts show that sukuk is making strides to close the gap between supply and demand.
  3. While sukuk has been available to retail investors since 2008, the evolving digital era offers the market even greater opportunity.

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Refinitiv has launched its Sukuk Perceptions and Forecast Study 2021: Thriving Amidst Uncertainty.

As the title suggests, the sukuk market has thrived during the COVID-19 pandemic, even after seeing already tremendous growth over the past few years.

Recent growth has been fuelled by two factors. First, the substantial financing requirements of governments to fund economic recovery and narrow the fiscal deficits that had built up to contain the impacts of COVID-19. And second, by corporates looking to shore up their financial positions amid the uncertainties of lockdown.

The industry is expected to grow by 10.8 percent over the next five years, to reach US$1.17 trillion in sukuk outstanding.

Read the report: Sukuk Perceptions and Forecast Study 2021: Thriving Amidst Uncertainty

Sukuk historical issuance 2017-Q3 2021

Gap between supply and demand narrows

The report details how the gap between supply and demand is expected to narrow from US$178 billion in 2021 to US$120 billion in 2026 as issuance continues to expand, mainly in the traditional markets.

As the gap narrows, investors’ buy-and-hold behaviour is also expected to change, resulting in improved secondary market liquidity.

Sukuk supply and demand 2016-2026

What challenges face the sukuk market?

Meanwhile, a survey of sukuk industry executives reveals some of the most pressing challenges facing the market. Investors were asked about the impact COVID-19 has had on their allocations of sukuk within their portfolios: 36.1 percent of investors said they had increased their allocations.

The report also asked corporate issuers about the main hurdles that are preventing stronger issuance growth. Most spoke of high issuance costs being a barrier, as well as the smaller sizes of corporate issues making them less attractive to investors.

For more insights and key findings, read the report.

Please also request your free trial to access our enhanced Sukuk Now app in Eikon and receive the latest sukuk data.

Watch – Sukuk Perception and Forecast Study 2021: Thriving Amidst Uncertainty

Get the Sukuk Now app in Eikon

Earlier this year, Refinitiv launched an enhanced version of its Sukuk Now app in Eikon and Workspace.

New features include an interactive heatmap, charts and breakdown analysis, as well as ESG sukuk flags. Users are able to run their analysis in a few clicks with a simplified workflow and better analysis.

Get the Sukuk Now app in Eikon