Saudi Arabia leads the Gulf Cooperation Council in the debt capital markets in a notable way, as it shows a drastic increase in fixed income instruments in the third quarter of 2025. Its positioning in this manner is a result of overall economic diversification initiatives, which continue to generate keen interest among investors across the Gulf region. This is evident in the rising interest in Shari’ah-compliant instruments as well as conventional bonds in the Gulf states.
Saudi Aramco’s dominance propels the regional debt market
Saudi Arabia registered issuances of $20.32 billion in Q3 of 2025, in a total of 36 issuances, reflecting a staggering annual growth of 62.7 percent, as evident in the latest report by Kuwait Financial Center. This portrayed a phenomenal story where Saudi Arabia stood at the lead in issuances in Q3 of this year, thereby contributing a cumulative of 52.5% towards issuances in the whole of the GCC.
The total fixed-income market in the Gulf Cooperation Council (GCC) region continued to witness growth, recording a cumulative primary issuance of bonds and sukuks of $38.74 billion in the third quarter of this year in 137 transactions. This indicates a marked rise of 32.4% over the third quarter of 2024, during which the total issuances stood at $29.29 billion. Trends in the fixed-income markets in the Gulf Cooperation Council countries represent an increasing desire to pursue large development projects, resulting in a particular affinity towards fixed-income instruments.
Sukuk preference emerges as key market trend
Sukuks emerged as Issuers in the UAE, ranked second, raising $5.82 billion in 57 deals, contributing a haul of 15.0% to the overall amount, a fall of 47.3% from the same period last year. Qatar ranked third, with a total of $5.69 billion raised in 29 issues, contributing a haul of 14.7% to the overall amount.
Pivoting in the background of the unprecedented success that Saudi Arabia is enjoying is a paradigm change in investment attitude towards the utilization of Shariah-compliant instruments in the overall GCC environment. It is pertinent to mention that the overall issuances of Sukuks recorded a staggering increase of 202.7% in Q3 of 2025, cumulatively amounting to contributions of $20.37 billion in YTD. This is a radical departure from the observed environment in Q3 of 2024.
Q3 2025 Market Segmentation:
- Sukuks: 52.6% of total issuances
- Conventional bonds: 47.4% of total issuances ($18
- Financial sector: $21.53 billion via 113 issues
- Public sector: $11.1 billion via 15 deals
Issuances continue to enjoy high activity in the region
Kuwait experienced a remarkable increase in issuances, recording a staggering 118.4% jump over the same period last year to reach $3.42 billion in eight deals. A whopping 539% surge in issuances in Bahrain topped the list, with issuances notching a staggering 539% at $2.55 billion in four deals. Such outstanding performance signals renewed confidence in the smaller markets of the Gulf Cooperation Council countries to tap funding from international capital sources.
“For issuance preferences, there is a heightened interest in the number of sukuoystick issuances in Q3 of 2025, which constitutes a total of 52.6% of the total issuances of the year,” according to a report from Markaz.
Oman had the lowest value of issuances at $0.94 billion in three deals, contributing 2.4% to total Middle Eastern activity. By maturity, primary issuances that had tenors of less than five years contributed 53.1% of the overall Gulf Cooperation Council debt capital markets value of $20.6 billion in a total of 100 transactions. U.S. dollar-denominated issues continued to lead in the market, with issuances of $28.1 billion in 74 transactions contributing 72.5% of total activity during the quarter.
Performance in the third quarter reinforces Saudi Arabia’s importance in the regional capital markets, as well as the overall power of the GCC in attracting a wide range of investors. A move towards the Sukuks indicates a strengthening of the Islamic finance markets’ sophistication in terms of meeting the Sharia-compliant investment needs of the clientele involved in this sector. This portends well for the future as Gulf countries press ahead with faster economic diversification initiatives.