Aggregated News From Investment Management Regulators

FRA approves the first issuance of Sukuk in the Egyptian capital market – Wednesday 8/4/2020

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• Dr. Omran: The first issuance of Sukuk worth 2 billion pounds will be offered for private subscription and listed on the Egyptian Stock Exchange

Dr. Mohammed Omran, FRA’s Chairman announced that the Authority agreed to offer the first issuance of Sukuk in the Egyptian capital market, with a total value of 2 billion Egyptian pounds – one single issuance – Ijarah Sukuk that is compliant with Islamic Sharia, tradable, and non-convertible. The Sukuk will be offered and listed on the Egyptian Exchange (EGX) for 57 months starting from the date of the issuance up to the end of 2024 at a nominal value of EGP 100 per instrument.

Dr.  Omran said that the approved information note includes offering 100% of the Sukuk to financial institutions, entities and individuals with experience and financial adequacy. Subscription proceeds shall go to the Arab Company for Projects and Urban Development (as the beneficiary company).  The Arab Company for Projects and Urban Development shall sell the shopping mall owned by it in Madinaty to EFG-Hermes Securitization.

Dr. Omran said that the Central Shari’a Supervisory Committee had issued its approval on the compatibility of the information note and issuance contracts with the provisions of Islamic Sharia in the last week of March. He added that this step represents one of the fruits of FRA’s continuous efforts in developing and raising the efficiency of the capital market after completing  the legal framework for issuances, procedures and  Sukuk trading in accordance with the amendments to the Capital Market promulgated by  Law no. 17 of 2018 and after the issuance of the  ministerial decree on amending the Executive Regulations of the mentioned  Law to include detailed provisions on Sukuk rules. That is in addition to issuing numbers of decisions by FRA’s BOD pursuant to the said Law and its Executive Regulations, on the top of it FRA’s BOD decision regarding the accounting standards for Sukuk issuers and beneficiary companies besides, auditing standards that auditors shall adhere to.

Dr. Omran noted that an amendment has been made to Article (12) of listing and delisting rules to allow listing of Sukuk and financing instruments issued by Egyptian joint-stock companies and legal persons and other entities after their approval by the Sub-Sharia Supervisory Committee and the approval of the Central Sharia Supervision Committee. Sukuk shall be offered for public or private subscription based on a prospectus, issuance, or information note approved by the Authority.

In addition, Dr. Omran said that Sukuk is of great importance in financing companies, public entities and public legal persons on the one hand and on the other hand it is an essential financial instrument for investors.  He added that FRA expects Sukuk to deepen the Egyptian-capital market and create added value for the national economy. He noted that this step represents a real beginning for putting Egypt on the map of Sukuk issuance globally and keeping pace with international changes in the financial markets.

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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