Saudi Arabia’s National Debt Management Center issued its second riyal-denominated sukuks for October with a record issuance worth SR7.83 billion or around $2.09 billion, representing a whopping 201 percent increase in comparison to the issuances of SR2.6 billion for September. The upward rise forms part of a robust trend in the kingdom’s sukuk market, seeing an issuance of SR6.01 billion in August, SR3.21 billion in July, and SR4.4 billion in June.

Sukuk or, rather, the Islamic financial instruments compliant with Sharia law, let investors take partial ownership over the underlying assets of its issuer. Moody’s, in a just-released report published in September, said that Saudi sukuk spate is on a par with higher expectations for global sukuk markets. In any case, the agency still forecasts sukuk issuance to exceed 2023 levels in 2024 even as it anticipates a slowing down in the second half of this year. Global Shariah-compliant bond issuance is estimated to have risen to between $200 billion and $210 billion in 2024, according to S&P Global, above almost $200 billion issued last year.

Sukuk, according to the NDMC, October release, had five tranches. The first tranche for SR823 million matures in 2029, the second tranche, valued at SR320 million, matures in 2031, the third tranche, valued at SR2.18 billion, in 2034, the fourth tranche, valued at SR1.43 billion, in 2036, and the fifth tranche, valued at SR3.07 billion, in 2039.

Explains Fitch Ratings: better funding conditions which have emerged since the U.S. Federal Reserve reduced its interest rate to 5% in September have boosted global sukuks. The agency sees more cuts ahead, projecting rates will fall by the end of 2024 to 4.5% and to 3.5% by the end of 2025, which could spur even more exceptional issuances in the near term. Sukuk outstanding worldwide stood at $900 billion as of the end of the third quarter of 2024, with annual growth at 8.5%.

However, for example, Islamic finance has a particularly significant center in the United Kingdom, according to a report published last month in August by Fitch. According to it, it’s the London Stock Exchange, the third largest listing venue globally for US dollar-denominated sukuk.