Egypt to raise much needed capital by Sukuk

Egypt plans to raise as much as $1 billion by June from the sale of its first Sukuk. Officials have compiled a list of about 25 projects that could be used as assets to back future sales, reported Bloomberg, citing Ahmed El-Naggar, adviser to Finance Minister El-Morsi El-Sayyed Hegazi. “The international market is waiting for Egypt’s Sukuk sale,” El-Naggar is quoted as saying. “I hope to start with two sales, one for domestic investors and one abroad.” The cost of insuring Egypt’s dollar-denominated debt for five years soared 169 basis points over the past month to 609, making it the world’s second-worst performer after Argentina, according to data provider CMA. “Egypt will have to pay a lot to issue the Sukuk,” Tariq Qaqish, deputy head of asset management at Dubai-based Al Mal Capital, is quoted as saying by Bloomberg. “On a macro level, things are not looking that good. However, this might change if we see political stability which would result in improvement in the economy.” Egyptian officials held a seven-hour meeting at the Finance Ministry on Feb. 20 to discuss issues including how to secure the best pricing for the first sale, El-Naggar reportedly said. The size of the first issuance will be between $500 million to $1 billion, he added. The Egyptian Government is working to amend the nation’s accounting standards to comply with AAOIFI, El-Naggar is quoted as saying.  Albawaba Business