According to a recent estimate, sukuk issuance in the Middle East and North Africa(MENA) increased by 48% to $6.2 billion in the first half of 2024, primarily due to social and environmental projects.
Based on data from Bloomberg’s Capital Markets League Tables, the growth of the Islamic bonds market has been driven mainly by sovereign issuances and those with environmental, social, and governance-related bonds. This is indicative of efforts to diversify funding bases and take advantage of growing investor interest in Islamic finance portfolios.
Strong expansion in the sukuk industry has been fueled by the desire for investments that adhere to Shariah globally. These products, which appeal to ethical investors and reflect a trend towards sustainable finance, are essential for supporting social activities, green projects, and infrastructure.
The UAE provided the remaining $2.25 billion from three sukuk issuances, with Saudi Arabia spearheading the rise with five issuances totaling $3.98 billion, according to Bloomberg’s research.
The market was driven by the banks in the area, with Emirates Islamic Bank issuing a $750 million maiden issuance that was noteworthy.
Given the UAE’s significant climate finance declarations at COP28 last year, this encouraging development highlights the Islamic banking sector’s dedication to ESG investing.
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