4 March 2013

Egypt: Sukuk Bill Referred to Shura Council

Finance Minister al-Morsi Hegazi said the Sukuk bill was referred on Sunday 3/3/2013 to the Shura Council for discussion, noting that the bill has been probed by the Cabinet's the legislative and economic committee where a detailed memo was drafted on the draft law.

He asserted that the bill entails all guarantees that safeguard the state's rights and the Sukuk holders.

The Minister's statements came during the press conference he held for expounding the importance of Sukuk for the Egyptian economy during the current stage.

Hegazi denied the rumors circulated on offering Egypt's antiquities for lease, asserting that the Sukuk aim at bridging the financial gap between the rates of saving, which reached 11 per cent and the investment needed rates, ranging between 35 and 40 per cent of the Gross Domestic Product (GDP) so as to create new jobs, increase the exports and offer foreign cash.

The minister also underlined that the Sukuk mechanism will not add any further burdens on the state's budget or the public indebtedness, given that the risks will be shouldered by the Sukuk holders.

Sukuk are essentially Islamic bonds in which the creditors buy shares in an investment or project, meaning that the holder of a Sukuk bond is technically a partner in the enterprise and not a creditor.

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