Liquidity scores for GCC US dollar sukuk and bonds have declined since the US-Israel and Iran war started, Fitch Ratings said in a report.
The average liquidity assessment (LQA) score for GCC US dollar sukuk fell to 45 on March 23, 2026, from 56 at the end of 2025. The average score for GCC US dollar bonds fell to 48 from 53 over the same period.
Fitch assesses liquidity using Bloomberg’s LQA scores, with 100 signifying the highest liquidity. A score of 100 is assigned to securities with the lowest liquidation costs within an asset class, while securities with the highest costs are assigned a score of 1.
LQA is a data-driven model that produces a daily, security-specific liquidity surface that captures the relationships among volume, cost, and time.
The LQA decline for investment-grade sukuk has been less severe than for speculative-grade sukuk on average. LQA scores have declined in most GCC debt capital markets since the war began, as well as for many sukuk issuers in Turkey, Egypt and Indonesia. In contrast, many rated Malaysian, Omani and supranational sukuk have shown resilience in their LQA scores.
According to Fitch, GCC debt capital markets have historically rebounded fairly quickly when tensions eased following previous Middle East geopolitical episodes, but the impact this time will depend on the scale and duration of the war.
To date, no Fitch-rated GCC sukuk have defaulted, with about 84% rated investment-grade, the report said, adding that a few sukuk issuers are currently on rating watch negative.
(Editing by Seban Scaria seban.scaria@lseg.com )