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RIYADH: The value of sukuk rated by Fitch Ratings exceeded $210 billion in the first half of 2025, marking a 16 percent increase from a year earlier, as demand for Shariah-compliant debt continues to accelerate across global markets. 

In its latest Islamic finance report, Fitch said that 80 percent of its rated sukuk maintain investment-grade status with no recorded defaults, highlighting the relative stability and creditworthiness of issuers despite tightening global financial conditions.

The US dollar remained the dominant issuance currency, accounting for over 90 percent of rated sukuk, followed by the Malaysian ringgit at 6.2 percent. 

Fitch currently rates more than 255 sukuk and 95 programs, representing over 70 percent of the outstanding global US dollar-denominated sukuk market. 

Earlier this month, a report by Kuwait Financial Center, also known as Markaz, echoed similar views, stating that US dollar-denominated instruments dominated the Gulf Cooperation Council debt market in the first half of 2025, raising $73.1 billion through 146 issuances — representing 79.4 percent of total value. 

Bashar Al-Natoor, global head of Islamic finance at Fitch Ratings, said: “Most Fitch-rated sukuk rank senior unsecured and hold international long-term ratings with about 87 percent of sukuk issuers having a stable outlook.” 

He added: “Over 90 percent of rated sukuk are US dollar-denominated and are largely characterised by bullet and fixed-rate structures. Medium-term sukuk with tenors between three to 10 years dominate, comprising over 81 percent of all rated sukuk.” 

Sukuk rated in the “A” category made up the largest share at 39 percent, followed by 25 percent in the “BBB” category and 13 percent in “BB.”  
 
Fitch also noted that 11 percent of all rated sukuk are considered long-term, with maturities exceeding 10 years, while only 7 percent have tenors shorter than three years. Most of these instruments are expected to mature by 2030. 
 
Environmental, social, and governance sukuk are also gaining traction, now accounting for 12 percent of all Fitch-rated sukuk outstanding, with a total value of $25 billion. 

Most ESG sukuk are dual-listed on major exchanges such as the London Stock Exchange, Nasdaq Dubai, and Euronext, reflecting their appeal to a broad international investor base. 

The analysis further highlighted increasing regional and sectoral diversification. The Middle East continues to lead with a 69.9 percent share of rated sukuk as of end of the first half, followed by Asia at 21.6 percent and Europe at 7.3 percent. 

Affirming the growth of the Middle East’s debt markets, Fitch noted in December that total outstanding debt in the GCC region surpassed the $1 trillion mark. 

Also in December, Kamco Invest projected that �������� would lead the region in bond maturities over the next five years, with around $168 billion in Saudi bonds expected to mature between 2025 and 2029 — underscoring the Kingdom’s growing prominence in regional debt markets. 

In its latest report, Fitch added that sovereign and supranational issuers still account for more than half of the rated sukuk market. However, issuer diversity is increasing, with sizeable contributions from financial institutions, corporates, international public finance, infrastructure and project finance, as well as structured finance. 

BEIJING: China’s exports beat forecasts in July, as manufacturers made the most of a fragile tariff truce between Beijing and Washington to ship goods, especially to Southeast Asia, ahead of tougher US duties targeting transhipment.

Global traders and investors are waiting to see whether the world’s two largest economies can agree on a durable trade deal by Aug. 12 or if global supply chains will again be upended by the return of import levies exceeding 100 percent.

US President Donald Trump is pursuing further tariffs, including a 40 percent duty on goods rerouted to the US via transit hubs that took effect on Thursday, as well as a 100 percent levy on chips and pharmaceutical products, and an additional 25 percent tax on goods from countries that buy Russian oil.

China’s exports rose 7.2 percent year-on-year in July, customs data showed on Thursday, beating a forecast 5.4 percent increase in a Reuters poll and accelerating from June’s 5.8 percent growth.

Imports grew 4.1 percent, defying economists’ expectations for a 1.0 percent fall and climbing from a 1.1 percent rise in June.

China’s trade war truce with the US — the world’s top consumer market — ends next week, although Trump hinted further tariffs may come Beijing’s way due to its continuing purchases of Russian hydrocarbons.

“The trade data suggests that the Southeast Asian markets play an ever more important role in US-China trade,” said Xu Tianchen, senior economist at The Economist Intelligence Unit.

“I have no doubt Trump’s transhipment tariffs are aimed at China, since it was already an issue during Trump 1.0. China is the only country for which transhipment makes sense, because it still enjoys a production cost advantage and is still subject to materially higher US tariffs than other countries,” he added.

China’s exports to the US fell 21.67 percent last month from a year earlier, the data showed, while shipments to ASEAN rose 16.59 percent over the same period.

The levies are bad news for many US trading partners, including the emerging markets in China’s periphery that have been buying raw materials and components from the regional giant and furnishing them into finished products as they seek to move up the value chain.

China’s July trade surplus narrowed to $98.24 billion from $114.77 billion in June. Separate US data on Tuesday showed the trade deficit with China shrank to its lowest in more than 21 years in June.

Despite the tariffs, markets showed optimism for a breakthrough between the two superpowers, with China and Hong Kong stocks rising in morning trade. Trump indicated earlier this week that he might meet Chinese President Xi Jinping later this year if a trade deal was reached.

TRADE UNCERTAINTY

China’s commodities imports painted a mixed picture, with soybean purchases hitting record highs in July, driven by bulk buying from Brazil while avoiding US cargoes. Analysts, however, cautioned that inventory building may have skewed the import figures, masking weaker underlying domestic demand.

“While import growth surprised on the upside in July, this may reflect inventory building for certain commodities,” said Zichun Huang, China economist at Capital Economics, pointing to similarly strong purchases of crude oil and copper.

“There was less improvement in imports of other products and shipments of iron ore continued to cool, likely reflecting the ongoing loss of momentum in the construction sector,” she added.

A protracted slowdown in China’s property sector continues to weigh on construction and broader domestic demand, as real estate remains a key store of household wealth.

Chinese government advisers are stepping up calls to make the household sector’s contribution to broader economic growth a top priority at Beijing’s upcoming five-year policy plan, as trade tensions and deflation threaten the outlook.

Reaching an agreement with the US — and with the European Union, which has accused China of producing and selling goods too cheaply — would give Chinese officials more room to advance their reform agenda.

However, analysts expect little relief from Western trade pressures. Export growth is projected to slow sharply in the second half of the year, hurt by persistently high tariffs, President Trump’s renewed crackdown on the rerouting of Chinese shipments and deteriorating relations with the EU.