Strait of Hormuz re-opening efforts face delays as nuclear compliance and inspection protocols take centre stage in Vienna talks. GCC spreads stabilise at 67 bps — essentially pre-war levels — as primary market reopening accelerates.
"The week of June 28 – July 4 marks a decisive inflection point for GCC and ASEAN sukuk and bond capital markets. Primary market reopening is confirmed."
Following the February 28 outbreak of the US-Iran war and the subsequent period of spread widening and primary market suppression, the US-Iran ceasefire framework signed in June has catalysed a rapid and broad-based recovery in investor confidence.
Investment-grade GCC sukuk spreads have returned to 67 basis points over UST — essentially at pre-war levels of 70 bps recorded on February 27, 2026, according to Fitch Ratings. The recovery trajectory is significant: spreads had peaked at approximately 100 bps on March 23 during the height of the conflict. The 33 bps compression over 13 weeks underscores the structural depth and resilience of the GCC sukuk market.
Primary market issuance has reopened with conviction. Bank AlJazira's $500M AT1 perpetual sukuk settled on June 24, anchoring the week's activity. The UAE Ministry of Finance's inaugural Retail T-Sukuk programme moved into active subscription — a landmark event for Islamic capital markets retail access. GCC sukuk issuance grew 13.1% year-on-year in the first four months of 2026, according to S&P Global, driven primarily by SAR-denominated local-currency issuance in Saudi Arabia.
Meanwhile, the Strait of Hormuz re-opening process is facing technical delays. Nuclear compliance verification and IAEA inspection protocol negotiations in Vienna are taking longer than initially expected, keeping a cautious geopolitical risk premium embedded in speculative-grade instruments even as investment-grade spreads normalise.
The Bank AlJazira AT1 settlement and UAE Retail T-Sukuk launch represent two distinct but complementary signals for The Corridor's mandate. AT1 sukuk activity confirms GCC bank capital instrument demand is recovering — directly aligned with The Corridor's Sukuk Structuring mandate for Tier-2 and AT1 advisory.
The UAE Retail T-Sukuk establishes retail-access sukuk infrastructure — a future distribution channel that expands the addressable investor base for GCC-ASEAN issuances. Both transactions reinforce The Corridor's thesis: Islamic capital markets are structurally deepening, independent of geopolitical shocks.
US-Iran war outbreak. Strait of Hormuz threatened. GCC USD sukuk issuance halts. Spreads begin widening from 70 bps baseline.
Spread peak — IG sukuk hit ~100 bps over UST. Oil spikes. Primary market effectively frozen. GCC sovereign local-currency issuances only continue.
Ceasefire talks begin in Oman. US diplomatic pressure mounts. Spreads begin gradual retreat as probability of resolution rises.
S&P notes GCC sukuk +13.1% YoY Jan–Apr. Local-currency market proved resilient throughout conflict. Dollar primary market beginning to reopen.
US-Iran MoU signed in Switzerland. 60-day JCPOA restoration path established. Hormuz reopening expected but facing nuclear compliance delays in Vienna.
Fitch reports IG sukuk spread at 67 bps — essentially pre-war. Liquidity recovering broadly. 72% of Fitch-rated sukuk now have LQA scores above 50.
This week — Primary market rebound in full motion. UAE Retail T-Sukuk live. H2 pipeline rebuilding across GCC and ASEAN. Vienna talks continue on nuclear compliance.
| Instrument | Spread | Change | vs Jan |
|---|---|---|---|
| GCC IG Sukuk (avg) | 67 bps | ▼ Recovery | -3 bps |
| GCC IG Bonds (avg) | 70 bps | Stable | +0 bps |
| GCC HY Sukuk (avg) | 251 bps | Lagging | +42 bps |
| Saudi sovereign | ~55 bps | ▼ Tightening | -15 bps |
| UAE sovereign | ~60 bps | ▼ Tightening | -10 bps |
| Saudi AT1 sukuk | ~650 bps | ▼ Post-war | — |
| UAE bank Tier-2 | ~180 bps | ▼ Recovering | -20 bps |
| Benchmark | Yield | Tenor | Source |
|---|---|---|---|
| US Treasury | 4.25% | 10Y | Fed, Jun 27 |
| Saudi NDMC (SAR) | Market | 2031-2041 | NDMC |
| Malaysia MGII | ~3.85% | 10Y | BNM, Jun 2026 |
| Indonesia SBSN | ~6.80% | 10Y | MoF Indonesia |
| UAE T-Sukuk | TBA | TBA | MoF UAE |
| Commodity | Price | Change | Notes |
|---|---|---|---|
| Brent Crude | $79.42 | +2.0% WoW | Above $79 first since March |
| WTI Crude | $76.18 | +1.8% WoW | Post-ceasefire recovery |
| Natural Gas (TTF) | €32.40/MWh | -3.2% WoW | Hormuz reopening signal |
| Gold | $2,318/oz | +0.5% WoW | Safe-haven demand easing |
| USD/SAR | 3.7500 | Pegged | Stable |
| USD/MYR | 4.4250 | +0.3% | Ringgit strengthening |
| Issuer | Country | Instrument | Size | Structure | Rate / Spread | Rating | Status |
|---|---|---|---|---|---|---|---|
| Bank AlJazira | Saudi Arabia |
AT1 Perpetual Sukuk | $500M | PerpNC5.5 | ~6.50% / UST+650 | — | Settled Jun 24 |
| NDMC | Saudi Arabia |
SAR Local-Currency Sukuk | SAR Multi | Ijarah | Market Rate | A+ / A1 | Settling |
| UAE Ministry of Finance | UAE |
Sovereign Retail T-Sukuk | AED (TBA) | Shariah-Compliant | TBA | Sovereign | Live |
| First Abu Dhabi Bank | UAE |
3Y Green Bond (EUR) | EUR 750M | Senior Unsecured | TBA | Aa3 / AA- | Settled |
| QIIB | Qatar |
5Y Senior Unsecured Sukuk | $500M | Wakalah | UST+85 bps | A2 / A | Settled |
| Arab Energy Fund | Multi |
5Y Senior Sukuk | $500M | Wakalah-Murabaha | 4.686% / SOFR+70 | Aa2 / AA+ | Settled Jun 16 |
| Alinma Bank | Saudi Arabia |
AT1 Sukuk | $500M | PerpNC6 | ~6.35% | — | Pipeline |
| Issuer | Country | Instrument | Size | Structure | Rate | Rating | Status |
|---|---|---|---|---|---|---|---|
| BNM / Malaysia MoF | Malaysia |
MGII Sovereign Sukuk Auction | MYR 4–5B | GII (Ijarah) | ~3.85% | AAA (MY) | Weekly |
| Indonesia MoF | Indonesia |
SBSN Sovereign Green Sukuk | IDR 12T | Ijarah / Wakalah | ~6.80% | BBB (Baa2) | Quarterly |
| Khazanah Nasional | Malaysia |
Sustainable Sukuk | MYR TBA | Musharakah | TBA | AAA (MY) | Pipeline H2 |
| Thai BMA Issuers | Thailand |
Green Bond Programme | ~THB 50B total | Conventional | Market Rate | Various | Programme 2026 |
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