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Egypt seeks to attract Islamic investors with debut sukuk, EGX Sharia index

While the move to allow Islamic bond sales will diversify the government's funding sources, Islamic finance is still a relatively small part of the Egyptian economy.
A stock market broker works at the Egyptian Stock Exchange, Cairo, Egypt, Jan. 6, 2013.

Egypt's Financial Regulatory Authority (FRA) is allowing domestic companies to sell traditional and Islamic bonds — known as sukuk — without the need for a credit rating, according to an official statement made on Monday. The move aims to reduce the cost of listing and issuing bonds and sukuk, and encourage more Egyptian companies to access debt instruments to fund their expansion and investment plans.

This comes after Egypt issued its first ever sovereign sukuk on Feb 21. The three-year $1.5 billion Sharia-compliant debt issuance, which offers an annual profit rate of 10.875%, was four times oversubscribed. The issuance is part of a $5 billion three-year sukuk program that the Ministry of Finance established Feb. 14 and is listed on the London Stock Exchange.

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