Emerging market bonds

18 August 2026, 14:05 UTC Chief Investment Office GWM Investment Research For investors outside of the US

Sukuk List: Maintain a quality bias Emerging market bonds Authors: Tatiana Boroditskaya, PhD, Analyst, UBS AG London Branch; Santosh Bukitgar, CFA, CAIA, Analyst, UBS AG Singapore Branch; Emre Tekmen, Analyst, UBS Switzerland AG

• The price of Brent crude oil remains elevated amid continued skepticism over the prospects of an imminent resolution to the conflict in the Middle East. Still, on balance, we expect energy flows to recover gradually over time, even if the path to this outcome may prove bumpy.

• The global sukuk market grew by about 15% y/y in 1H26, primarily driven by local market issuance across Malaysia, Qatar, Saudi Arabia, and Türkiye, according to a recent S&P report. Hard currency-denominated sukuk issuance has declined y/y, as some prominent GCC issuers chose to raise debt through conventional private placements. A slower growth path for international sukuk is likely to support the secondary market by increasing the scarcity Source: UBS value of existing instruments, in our view. Please note that CIO does not certify compliance with Sharia for the sukuk mentioned in this report, but instead relies • Given ongoing regional and issuer-specific risks, on the issuers' indication of an instrument being sukuk and selectivity and diversification remain essential, in our its structure. The labeling of instruments as sukuk in this view. In the Top Sukuk List, we maintain a quality bias, report should not be construed as implying a CIO view on favoring higher-rated issuers while staying selective in the the veracity of Islamic credentials. high yield segment.

• Geopolitical developments, the global macro backdrop, the oil market outlook, and idiosyncratic factors relevant to individual issuers are key risks to monitor.

The year-to-date total return of the JPMorgan MECI Sukuk Table 1 - CIO sukuk coverage: key metrics index stands at 0.9%. Sukuk spreads, at the index level, have remained broadly unchanged since the start of the year, despite a brief widening at the onset of the US- Iran conflict. The current average yield of 5.9% on the JPMorgan MECI Sukuk index provides an attractive entry point for investors who are underallocated to sukuk. Our Top Sukuk List emphasizes higher-rated issuers, and we remain selective in the high yield segment. For details, see Source: UBS, as of 18 August 2026 Tables 1-4, covering the sukuk universe, top picks, and issuer characteristics under CIO coverage.

This report has been prepared by UBS AG London Branch, UBS AG Singapore Branch, UBS Switzerland AG. Analyst certification and required disclosures begin on page 10. UBSFS accepts responsibility for the contents of this report. U.S. persons who receive this report and wish to effect any transactions in any security discussed in this report should do so with UBSFS and not UBS AG. Page 1 of 15

Emerging market bonds: For investors outside of the US

Table 2 - Top Sukuk List Please refer to Emerging Markets Bond List for the latest bond recommendations. T2 subordinated instruments include Al Rajhi Bank 2036, Riyad Bank 2035, Saudi National Bank 2036.

Source: UBS as of 17 August 2026. Restrictions for European Economic Area domiciled investors: 1) Complex bond under MiFID, 2) PRIIPS relevant bond, KID missing exp = Expensive; attr = Attractive

Table 3 - CIO sukuk coverage: List of issuers

Source: UBS, as of 18 August 2026