The Gulf’s Capital-Market Moment

The Gulf is no longer just a source of capital — it is fast becoming a destination for it. Record debt issuance, deepening exchanges, and a wave of economic diversification have turned the region into one of the more compelling stories in emerging markets, drawing international investors who once looked past it entirely.

A record run

Global sukuk issuance reached roughly $291 billion in 2025, up around 14.5% on the year, with the Gulf Cooperation Council accounting for close to half of the global total. Saudi Arabia has been the engine, relying on issuance to fund its ambitions, while exchanges across the region have deepened and IPO activity has picked up. What was once a peripheral market is becoming a core one.

The drivers

Behind the numbers sits a deliberate transformation. Sweeping economic-diversification programmes are pushing Gulf economies beyond oil, and heavy investment in AI and infrastructure — particularly in Saudi Arabia and the UAE — is reshaping their growth profiles. Just as important, foreign-currency sukuk issuance has climbed past $100 billion, a sign that international, non-Islamic investors are increasingly buying in, drawn by the instruments’ asset-backed structures and their alignment with ethical and ESG mandates.

For the global investor

For an investor seeking exposure to a fast-deepening market, the Gulf now offers both conventional and Shariah-compliant instruments across a widening range of issuers — a genuine broadening of the opportunity set, and one especially relevant to investors from and near the region. The caveats are real: the Gulf remains sensitive to oil prices and regional geopolitics, and some analysts expect the pace of Islamic-finance growth to moderate in the near term as those tensions weigh on the outlook. But the structural direction — deeper, broader, more open markets — is clear.