15 May 2013
The Finance Ministry is preparing the executive charter of sukuk, or Islamic bonds law. Finance Minister Fayed Abdel-Moneim made the announcement at a conference held this week in Cairo on the practical implementation of sukuk. Nesma Nowar reports.
Sukuk was given the green light by President Mohamed Morsi and published in the official gazette last week after being unanimously approved by the Shura Council, the upper house which until a new parliament is formed has legislative powers.
This came after the Shura last month incorporated remarks issued by the Islamic Research Academy (IRA) of Al-Azhar, said Ahmed Al-Naggar, advisor to the finance minister, during the conference.
Abdel-Moneim said the executive charter of the law is the final step before its implementation, adding that the ministry would open the issue for public discussion on the ministry's website.
Abdel-Moneim added that the ministry is now studying several projects to be financed through sukuk bonds including railway and wheat silos. "The ministry is very keen on choosing projects that are very productive," said Abdel-Moneim.
He added that the recent downgrading of Egypt's long and short-term credit rating would not affect the issuance of sukuk bonds, explaining that such downgrades would only affect regular bonds that depend on credit.
Also speaking at the conference, Hussein Hamed Hassan, a Shura Council member, applauded the issuance of the sukuk law in Egypt, saying it was the only way to finance development projects in the country without highly associated cost. Hassan added that traditional interest bearing financing had presented several countries with many economic challenges.
Hassan pointed out that financing through sukuk bonds, as stipulated in Article 18 of the law, is temporary financing to fund or develop a certain project which afterwards is returned to the project owner.
He added that in order for a project to be financed through sukuk, its revenues should be greater than its cost.
Abdel-Aziz Al-Hanae, vice president of the Islamic Development Bank (IDB), said that the IDB would support Egypt and promote the Egyptian issuance of sukuk bonds and would also provide technical assistance throughout the issuance process.
Al-Hanae added that sukuk global had grown over the past three years from $34 billion in 2009 to more than $140 billion in 2012.
The Finance Ministry is preparing the executive charter of sukuk, or Islamic bonds law. Finance Minister Fayed Abdel-Moneim made the announcement at a conference held this week in Cairo on the practical implementation of sukuk. Nesma Nowar reports.
Sukuk was given the green light by President Mohamed Morsi and published in the official gazette last week after being unanimously approved by the Shura Council, the upper house which until a new parliament is formed has legislative powers.
This came after the Shura last month incorporated remarks issued by the Islamic Research Academy (IRA) of Al-Azhar, said Ahmed Al-Naggar, advisor to the finance minister, during the conference.
Abdel-Moneim said the executive charter of the law is the final step before its implementation, adding that the ministry would open the issue for public discussion on the ministry's website.
Abdel-Moneim added that the ministry is now studying several projects to be financed through sukuk bonds including railway and wheat silos. "The ministry is very keen on choosing projects that are very productive," said Abdel-Moneim.
He added that the recent downgrading of Egypt's long and short-term credit rating would not affect the issuance of sukuk bonds, explaining that such downgrades would only affect regular bonds that depend on credit.
Also speaking at the conference, Hussein Hamed Hassan, a Shura Council member, applauded the issuance of the sukuk law in Egypt, saying it was the only way to finance development projects in the country without highly associated cost. Hassan added that traditional interest bearing financing had presented several countries with many economic challenges.
Hassan pointed out that financing through sukuk bonds, as stipulated in Article 18 of the law, is temporary financing to fund or develop a certain project which afterwards is returned to the project owner.
He added that in order for a project to be financed through sukuk, its revenues should be greater than its cost.
Abdel-Aziz Al-Hanae, vice president of the Islamic Development Bank (IDB), said that the IDB would support Egypt and promote the Egyptian issuance of sukuk bonds and would also provide technical assistance throughout the issuance process.
Al-Hanae added that sukuk global had grown over the past three years from $34 billion in 2009 to more than $140 billion in 2012.
© Al Ahram Weekly 2013
