President Abdelfatah El-Sisi ratifies the law regulating the issuance of sovereign sukuk
For our hottest news of the day, President Abdelfatah El-Sisi ratifies the law regulating the issuance of sovereign sukuk, paving the way for the government to issue the first sharia-compliant bonds in the local and global debt market. The law will allow selling different types of sukuk in both local and international markets, including ijara, mudaraba, istisnaa, murabaha and wakala sukuk with a maximum term limit of 30 years for all sovereign sukuk. In addition, a Sovereign Sukuk Company will be established which is going to carry out and manage the sale of the issuance. The Ministry of Finance is planning to issue the first sovereign sukuk once the draft law comes into force.
- Second, The Ministry of Planning and Economic Development is planning to invest 125.7 billion EGP in the industrial sector during the 21/22 fiscal year with 16.6 billion EGP of the total investment to be directed towards the oil refining field and the remaining 109.1 billion EGP invested in the non-oil manufacturing industries.
The Ministry is aiming to increase the output of non-petroleum manufacturing industries by 11.9% to 808 billion EGP during the current fiscal year. This comes within the framework of the state’s medium-term plan for achieving sustainable development, which started in FY 2018/2019.
- Third, The World Bank’s cooperation portfolio with Egypt has now reached 5.4 billion USD covering 15 projects in various sectors, including education, healthcare, transport, oil, and housing.
The two parties have discussed during a meeting held between Minister of Investment and International Cooperation Rania Al-Mashat and the Regional Director Ayat Soliman several projects that are being implemented in Egypt in collaboration with the World Bank in the fields of climate action, social development, and women empowerment, in addition to, the Upper Egypt development program.
- Similarly, The European Bank for Reconstruction and Development (EBRD) has agreed to provide a $25 million two-year working capital loan to United Metals Company (UMC), a 99.8%-owned subsidiary by Elsewedy Electric.
UMC will use the proceeds to support its working capital needs, finance sourcing raw materials, and improve the company’s financial resilience amidst the COVID-19 pandemic. UMC is an Egypt-based joint-stock company, operating in the field of copper rods production, which is the main raw material used in the production of copper cables.
- On another note, Contact Financial Holding (CNFN) is considering the issuance of securitized bonds worth 1.5 billion EGP in Q4 2021 according to the company’s chief financial officer (CFO) Ayman El-Sawy.
Proceeds from this issuance will be used to re-finance the company’s financial portfolios as well as to obtain cash liquidity to finance its future plans. Moreover, Contact Financial Holding is mulling over the issuance of sharia-compliant bonds worth 6 to 7 billion EGP for three real estate companies before the end of 2021.
- Moving on to the M&As coverage, Swvl, a transport startup based in Dubai, has entered into an agreement to acquire Shotl, a Barcelona based on demand intra and intercity bus transport platform.
The acquisition will more than double Swvl’s geographical footprint with Shotl operating in 22 cities across 10 countries including Brazil and Japan. Swvl has agreed last July to merge with Qeen’s Gambit Growth Capital in a SPAC transaction worth 1.5 billion USD with plans to reach 15 billion USD by 2022.
- Equally important, Bidayat, an Alsara Investment Group company, founded by Rachid Mohamed Rachid acquired a stake in Egyptian luxury brand Okhtein, the first investment for the group in Egypt.
The partnership will provide funding, know-how, operational support and access to a global network of industry experts. Bidayat’s parent company, Alsara Investment Group, has also previously invested in luxury eyewear player, Akoni Group, and puffer jacket specialists, Khrisjoy.
- Regarding our companies’ coverage, Ortiental Weavers Carpet reports net profits of 669.5 million EGP for H1 2021, a 151.4% year on year increase compared to 266.4 million in H1 2020.
Sales revenue for the company grew 37.5% year on year reaching 5.61% in the first half of the year from 4.08 billion EGP during the same period last year.
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