Sukuk would attract a new segment of Egyptian and foreign investors interested in financial investment in accordance with the principles of Islamic Sharia Egypt's Minister of Finance Mohamed Maait has confirmed that the country is preparing to issue the first offering of sovereign sukuk immediately after parliamentary approval. It will also follow the issuance of the sovereign sukuk law, which will contribute to achieving financial, economic, and development goals by diversifying the sources of financing the state's general budget deficit. The law will also provide the financial allocations needed for investment projects. Maait pointed out that, with the issuance of this law, Egypt is entering the Islamic finance market for the first time, with the volume of sukuk issuances reaching $2.7trn. This helps attract new Egyptian and foreign investors to invest in accordance with the principles of Islamic Sharia in both local and foreign currencies. The investments will occur provided that the sukuks are registered in the local market on the Egyptian Exchange (EGX), and kept in the Misr for Central Clearing, Depository and Registry (MCDR). The minister explained that the sukuk issuance will take place on the basis of assets that will be privately owned by the state. This is by selling the right of usufruct of these assets without the right of neck, or by leasing them, or by any other method consistent with the contract of issuance of these sukuk in accordance with the principles of Islamic Sharia. A decision by Prime Minister Mostafa Madbouly defining the state-owned fixed and movable assets as "private property" will be issued. This ensures that there is a mechanism to assess the right to use those assets on the basis of which the sukuk are issued, or in return for leasing them for this purpose. He pointed out that the sukuk will be issued in the form of a paper or electronic certificate with the specifications determined by the executive regulations of the law. It will be nominal, of equal value, and issued for a specific period in Egyptian pounds or foreign currencies through public or private offerings in the local market or in international markets. Maait added that a state-owned company will be established to manage and implement the process of "sukuk" government sovereign sukuk that will act as an agent for the sukuk owners. The minister said that the maximum period for determining the usufruct of the assets on the basis of which the sukuk is issued or the period of leasing them is 30 years, in compliance with the provisions of the constitution. These assets may be re-leasing to the issuer, stressing that it is prohibited to seize or take executive measures on the assets on the basis of which the sukuk are issued.
