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Tuesday, 2 February 2021

Sarwa’s advisory pipeline includes EGP 10 bn worth of sukuk

Sarwa Capital is quarterbacking at least three sukuk issuances this year with a combined value of more than EGP 10 bn, the local press reports, citing sources in the know. The consumer- and structure-finance player’s sukuk issuance manager, Sarwa Sukuk Company, is currently working on an EGP 5.5 bn offering for real estate player Palm Hills Development (PHD), a EGP 3 bn sale for real estate outfit Hassan Allam Properties, and a EGP 1.1 bn offering for home- and resort-builder Amer Group, the sources say.

Record breaking? If the figures are accurate, the size of the PHD and Hassan Allam sales would break the record set by Sarwa last year, when it closed a EGP 2.5 bn issuance. Sarwa was the first financial services company to land a sukuk license in Egypt.

We already knew about the Amer sale: Sarwa Capital CFO Ayman El Sawy said last year that it would issue EGP 2 bn of sukuk for Amer in 1Q2021, a figure almost double that of yesterday’s report.

Egypt’s sukuk market only saw the light of day in 2019 when the Financial Regulatory Authority (FRA) published the regulatory framework. After EGP 5.1 bn of the sharia-compliant securities were issued last year, some expect the market to swell to EGP 20-25 bn this year. So far, only three companies have issued sukuk: private education outfit Cira in December, Sarwa a month earlier, and Talaat Moustafa Group in April.


EFG Hermes Corp-Solutions is looking to securitize a part of its receivables portfolio in the second half of 2021, said Talal Elayat, who heads up the investment bank’s subsidiary. Corp-Solutions, which provides leasing and factoring services, grew 55% in 2020, Elayat said.

Egypt’s secondary bond market may be getting a new lease on life, according to Al Mal, which quotes sources saying that the FRA wants to use the momentum generated by the recent spate of corporate issuance to finally bring retail investors into the fold to push towards an active market. The regulator will invite investors to take part in public consultations on what needs to happen to kickstart a secondary market, the sources said.

Correction: 2 February 2021. Sarwa will manage a EGP 3 bn issuance for Hassan Allam Properties. A previous version of this story taken from Al Borsa incorrectly said that Sarwa will manage a EGP 4 bn issuance for Hassan Allam Holding. 

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