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Wednesday, 29 January 2020

Four Egyptian companies prepare to offer EGP 5 bn sukuk listings

DEBT WATCH- Four Egyptian companies are gearing up to issue EGP 5 bn in sukuk on the EGX, Al Shorouk reported head of the Financial Regulatory Authority’s (FRA) insurance department Sayed Abdelfadil as saying. CIAF Leasing will offer USD 50 mn while Talaat Moustafa Group (TMG) will issue EGP 2 bn before the end of March (which is slightly sooner than previously expected). The two unnamed companies — one of which is a real estate holding company and the other a hospitality company — will offer EGP 1 bn and EGP 1.5 bn respectively. Both are still in the stage of preparing the required documents. Abdelfadil also disclosed that EFG Hermes has obtained approval for the EGP 1 bn sukuk issuance for TMG.

EFG Hermes, Banque Misr, and Abu Dhabi Islamic Bank will receive sukuk licenses within the next three months, Abdelfadil said. Consumer and structured-finance player Sarwa Capital was granted Egypt’s first sukuk license last year and will meet today with FRA officials to discuss a new issuance.

EFG Hermes is also in talks to manage green bond issuances: EFG Hermes is negotiating to manage an unnamed state company’s green bond offering, sources told the local press, without disclosing the value of the issuance.

And regulators are currently deciding whether to approve a EGP 500 mn green bond issuance by an unnamed Norwegian renewable energy company, according to a separate report.

These would be the first green bond issuances in the country: The Capital Markets Act issued last July opened the door to the introduction of new financial instruments, including short-selling, futures and commodities exchanges, sukuk, and green bonds. But FRA chief Mohamed Omran believes that green bonds will be the “biggest challenge” for financial markets over the coming period, even after the authority in November slashed inspection fees in half.

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