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Thursday, 9 July 2020

FRA looks to boost local bond market with discounts, variable returns

FRA looks to boost local bond market by cutting the cost of trading, allowing variable-return bonds: The Financial Regulatory Authority (FRA) is close to finalizing recommendations to stimulate trading activity in the local bond market, according to Mohamed Maher, a member of the regulator’s advisory committee and chair of industry lobby group the Egyptian Capital Markets Association (ECMA). The FRA is reportedly considering several measures to draw more investors into the market, including cutting the costs of trading and diversifying securities to include bonds with variable returns and maturities of up to 15 years. Also under review are tax exemptions on investing in bonds and allowing brokerage firms to trade in restricted issuances, Maher said, without providing additional details. The FRA will take the lead in implementing the proposals, coordinating with the central bank and Finance Ministry, he noted.

The FRA will resume discussions during the next few days after shelving talks earlier this year due to the coronavirus pandemic. Maher said.

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