Gulf Bonds and Islamic Finance: Sukuk, Pegs, Banks — 2026-09-25
The UAE's second sovereign retail T-Sukuk opened for subscription at a 5.06% profit rate, while Moody's flagged a second-half recovery for GCC sukuk after a 23% first-half drop in issuance. Saudi Arabia is digitizing its riyal sukuk market with electronic trade execution and settlement, and Kuwait passed new legislation enabling sukuk borrowing. GCC banks posted $34.47 billion in combined H1 2026 profits, up 6%.
Gulf Bonds and Islamic Finance: Sukuk, Pegs, Banks — 2026-09-25
Top developments
UAE launches second retail T-Sukuk at 5.06%
The UAE Ministry of Finance opened the second issuance under its Sovereign Retail T-Sukuk Program on September 23, running through September 28, 2026. The AED50 million (~$13.6 million) five-year issuance carries a 5.06% annual profit rate, with a Dh1,000 minimum and listing on Nasdaq Dubai on October 1, 2026. Following the strong debut of the first retail offering, this second issue deepens the sovereign's push to build a retail investor base
Moody's sees H2 sukuk recovery after 23% H1 slump
GCC sukuk issuance fell 23% in the first half of 2026, with UAE issuance plunging while Saudi corporates bucked the regional slowdown, according to EnterpriseAM citing Moody's. Green and sustainable sukuk were hit hardest, falling 53% to $2.4 billion from $5.1 billion a year earlier; Saudi Arabia accounted for $2.1 billion of that green segment. Moody's expects a second-half recovery as GCC issuers return to markets, with global sukuk issuance seen at around $280 billion for 2026
Saudi riyal sukuk market moves to electronic trading and settlement
Saudi Arabia is bringing trade execution, clearing and settlement into one connected electronic workflow for its riyal-denominated sukuk and bond market. The change is aimed at improving secondary-market liquidity, price discovery and making it easier for investors to find existing liquidity in the domestic market
Kuwait legislates for sukuk borrowing; Bahrain data weakens
Kuwait passed legislation for sukuk borrowing alongside a new mortgage law, opening a new funding channel for the state, according to the Middle East FX weekly. Bahrain's economy contracted 3.8% in Q1 and its FX reserves sit at their lowest, while Oman is described as the only GCC country benefiting economically from the ongoing conflict environment
GCC bank profits reach $34.47 billion in H1
Listed GCC banks' combined profits rose 6% year-on-year to $34.47 billion in the first half of 2026, underscoring the sector's resilience despite regional geopolitical pressure. Separately, UAE Islamic banks' total assets grew 5.2% (+AED49.8 billion) over seven months of 2026
Local view
Arabic media are focused on the retail angle. Al Khaleej highlighted Moody's forecast of $4.6 billion in UAE sukuk issuance for 2026 within a ~$280 billion global market. Arabic financial press (Asharq Al-Awsat) covered the digitization of the Saudi riyal sukuk market as a structural liquidity upgrade.
Context & numbers
- GCC sukuk issuance: -23% in 1H 2026; green/sustainable sukuk down 53% to $2.4bn from $5.1bn
- Malaysian issuance context: $49.2bn in 1H 2026, up 39% from 1H 2025
- Moody's 2026 global sukuk forecast: ~$280 billion
- UAE retail T-Sukuk #2: AED50m target, 5.06% five-year profit rate, subscription Sept 23–28
- GCC listed bank profits: $34.47bn in H1 2026, +6% y/y
- The Fed's September rate hike to 3.75%–4.00% keeps pressure on Gulf rate settings via dollar pegs
On the radar
- UAE retail T-Sukuk closes September 28; Nasdaq Dubai listing expected October 1, 2026
- Moody's projected H2 recovery in GCC sukuk issuance — watch for new mandates after the sovereign issuance lull
- Saudi PIF is reportedly considering a $500 million Gulf bond mandate for Pimco targeting Gulf government bonds — a potential demand signal for regional sovereign paper (reported; not confirmed)
- Kuwait's newly passed sukuk borrowing legislation could pave the way for its first sovereign sukuk program issuance — timing unannounced
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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