Islamic Capital Market emerges as a trillion-dollar force in global finance

DUBAI, 22 SEPTEMBER 2026 —

Global Islamic capital market assets reached an estimated $5.2 trillion in 2025—up from $4.2 trillion in 2022—while outstanding sukuk surpassed the $1 trillion mark for the first time, according to AlHuda Centre of Islamic Banking and Economics (AlHuda CIBE).

The Islamic Capital Market (ICM) has expanded beyond sukuk to include Shariah-compliant equities, Islamic investment funds, exchange-traded funds (ETFs), real estate investment trusts (REITs), and pension structures. Islamic investment funds now manage over $350 billion in assets, supported by tighter regulatory oversight, stronger Shariah governance frameworks, and improved standardization of screening methodologies. The growth of Islamic indices and ETFs has made these products more accessible to both institutional and retail investors.

Muhammad Zubair Mughal, CEO of AlHuda CIBE, described the ICM as no longer a niche alternative but a "strategic pillar" of global finance. He noted that sukuk, Islamic funds, and other Shariah-compliant instruments now provide asset-backed, risk-sharing solutions aligned with environmental, social, and governance (ESG) principles. Non-Muslim investors are increasingly drawn to these products for their transparency and real-economy focus, particularly in infrastructure, energy, and sovereign financing.

AlHuda CIBE has played a key role in developing the ICM through advisory, research, and capacity-building initiatives. Its work spans sukuk structuring, Islamic fund development, Shariah governance frameworks, and regulatory alignment with international standards such as the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB).

The center has supported regulators and financial institutions across more than 100 countries, including sovereign and corporate sukuk issuances, Islamic collective investment schemes, and Shariah compliance systems for capital market operations.

Looking ahead, the ICM’s growth will be driven by continued sovereign sukuk issuance, rising ESG-driven investment trends, and technological advancements such as digital sukuk platforms and fintech-enabled Shariah investing. Challenges remain in standardization, liquidity, and product diversification, but the sector’s deepening integration into mainstream finance ensures long-term relevance.

Malaysia’s position as a sukuk hub remains critical, with Bank Negara Malaysia’s regulatory framework and Bursa Malaysia’s sukuk listings supporting the market’s expansion. The country’s sukuk issuance has consistently ranked among the top globally, reinforcing its role as a key player in the ICM’s growth. The sector’s diversification—from traditional sukuk to Islamic ETFs and REITs—reflects its adaptability, while AlHuda CIBE’s global advisory footprint underscores the ICM’s shift from regional to international prominence.

The $1 trillion sukuk milestone marks a turning point in its acceptance as a core financial instrument.