Egypts Financial Regulator expects 3 sukuk offerings in Q4 2021: Sources

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Despite various capital market authorities in Egypt expecting a momentum in sukuk offerings during 2021, there have been no such offerings made yet this year.

It was expected that the total value of the sukuk offered during the year would exceed $20bn, according to officials from sukuk companies.

Moreover, Egypt’s Financial Regulatory Authority (FRA) has no sukuk offerings on the table. So will companies be able to reach the target volume of sukuk by the second half (H2) of the year?

Official sources have told Daily News Egypt that three requests for sukuk offerings are expected to be submitted after the Eid Al-Adha holidays, out of a total of five companies that are currently studying such offerings.

The sources expect the procedures for the three offerings to be completed during Q4 of 2021.

Hassan Allam, Palm Hills Developments, Wadi Degla, and Amer Group, in addition to an agricultural reclamation company, are considering offering sukuk during the coming period. Sources suggested that the offerings most likely to be implemented are by Palm Hills and Wadi Degla.

A source added that the offering by Amer Group is expected to be postponed to the beginning of next year as the company aims to implement the offering through a mixed formula that includes two types of currently available sukuk formats. This requires more procedures and time for the offering to be implemented.

Of note, the total number of sukuk issuances in its first year of approval (2020) in the capital market was three, with a total value of EGP 5.1bn.

FRA Chairperson Mohamed Omran said in an earlier statement that the authority seeks to develop the sukuk market in 2021, once economic conditions improve and the need for funding new investments arises. The value of issuances is expected to increase to EGP 10bn in 2021.

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