The Irish Stock Exchange (Euronext Dublin) is the largest listing venue for global sukuk outstanding in hard currencies, covering 38% of global sukuk at end-3Q2024 (3Q2023: 41%), with the London Stock Exchange (LSE) and Nasdaq Dubai not far behind, Fitch Ratings says.
Fitch rated over three quarters of the hard-currency sukuk listed on Euronext in 3Q2024, with about 70% of the rated sukuk being investment grade, and expects Euronext Dublin to remain one of the top three global sukuk listing destinations. Fitch also rated its first sukuk out of Ireland, issued by AerCap Holdings (‘BBB/Positive’) in 3Q2024, which amounted to $500m. Moreover, Ireland has the largest public Islamic funds market amongst Western jurisdictions and ranks third-largest globally.
The listed sukuk in Euronext Dublin was up by 5.2% year on year at end-3Q2024 (about $90bn outstanding; hard currencies), outpacing listed bonds, which fell by 2%. However, sukuk still represents a minor share of outstanding debt in Euronext (4%; hard currencies).
The exchange has attracted numerous sukuk issuers and Islamic funds globally, on the back of Ireland’s enabling regulatory and legal framework, along with a favourable tax regime and supportive human capital that can service the sector. This enables Islamic finance issuers and investors to access broader markets, including Europe.
Diversified market
The Euronext-listed sukuk are diverse in terms of country of risk. The UAE has the largest share (28.1%), followed by Turkiye (14.7%), Saudi Arabia (12.5%), and other domiciles (44.7%). These listed sukuk are less diverse by currency distribution, and mostly dominated in US dollars (3Q2024: 96.9%; $86.5bn), with smaller portions in euros (3%; $2.6bn) and pound sterling (0.1%; $0.11bn). In 9M2024, 13.1% of globally issued sukuk in hard currencies were listed on the Euronext exchange.
Despite the favourable environment, the domestic Islamic finance industry and sukuk issuance in Ireland remains undeveloped. Less than 2% of Ireland’s population was Muslim in 2022, and so demand for Islamic financial products is low. There are no fully-fledged Islamic banks operating within the country. The Islamic finance sector is primarily supported by international sukuk issuers.