According to Standard & Poor’s credit ratings agency, the UAE is set to become a key driver in the sukuk market by 2026, having played a significant role in the success of the sukuk sector in 2025. Mohammed Damak, the global head of Islamic finance at MSN Money, anticipates that the total volume of issuances in the market could reach $150 billion by 2026.
The UAE stands out as one of the most active and influential issuers in the sukuk market. The momentum for sukuk issuance this year is attributed to real estate companies seeking to capitalize on improving market conditions and the Federal Reserve’s decision to lower interest rates during the year.
Damak also noted that the geopolitical situation and its potential repercussions in the region will have a limited impact on the banking systems of the UAE and Gulf countries. However, a decline in stock issuance in the US or a significant spike in inflation could affect the stock market, as the sukuk market is part of the broader capital market narrative and an important component of emerging markets.
When analyzing the energy market fluctuations, Damak indicated that the base scenario suggests oil prices will remain at least $60 per barrel this year, contingent upon stable supply dynamics. Should prices fall below this threshold, it could lead to an increased need for funding among several oil-exporting nations.
This scenario suggests a greater necessity for these countries to issue more sukuk. Conversely, prolonged drops in oil prices might alter corporate strategies, potentially leading to a reduction in sukuk issuances as companies become more cautious about investments.