Egypt Approves Issuance of Sovereign Sukuk in Int'l Markets

The Egyptian Cabinet approved on Wednesday the start of issuing sovereign sukuk in international markets.

Earlier, the Egyptian Finance Minister Mohamed Maait confirmed that Egypt is preparing to issue the first sovereign sukuk offering during the second half of the current fiscal year.

The issuance of the Sovereign sukuk aims to providing the necessary funding for investment projects included in the economic and social development plan in the state’s general budget, and to achieve development goals in a manner consistent with the state’s efforts to enhance aspects of spending on improving the standard of living of citizens.

The minister added that work will be done to issue the executive regulations of the law within 3 months, in cooperation with the Financial Regulatory Authority (FRA) and Al-Azhar; this is to give a legal and technical character in accordance with formulas compatible with the principles of Islamic Sharia, in a way that contributes to attracting a new segment of Egyptian and foreign investors wishing to invest in accordance with Islamic law in both local and foreign currencies.

Sukuk differ from other government securities (such as bonds and treasury bills) in that they are subject to speculation and are subject to loss or profit, however, in Sukuk, the financier is a partner in the rights to use the assets.