Roundtable on competitive advantages of sukuk to launch on 27 January

Daily News Egypt
3 Min Read
Roundtable on competitive advantages of sukuk to launch on 27 January

The advertising and PR firm, Media Avenue, will launch a virtual roundtable, on 27 January, to discuss the competitive advantages of sukuk over other financing instruments.

The roundtable, which will take place in cooperation with the Association of Investors and Exporters of Debt Instruments, will discuss the requirements of a successful sukuk issuance.

It will also review the factors that determine the appropriate type or form of the instrument, with the participation of all parties associated with the process of issuing the sukuk.

The roundtable’s launch comes after the success of three sukuk issuances and the stock market’s readiness to receive three further offerings, one of which comes from Amer Group, in addition to an agricultural reclamation company.

The Egyptian market is targeting the issuance of sukuk worth more than EGP 10bn during 2021, after the issuance of sukuk rose to EGP 5.1bn by the end of 2020.

Talaat Mostafa Group (TMG) initiated the Egyptian market’s first sukuk issuance, worth EGP 2bn, which was followed by Sarwa Capital with an EGP 2.5bn sukuk offering. The Cairo Investment Company also offered EGP 600m of sukuk at the end of last year.

The roundtable will also touch on the mechanisms of issuing sukuk and the process of securitisation and parties, as well as how to rehabilitate companies and prepare for the issuance of sukuk.

This comes in addition to: the project’s credit rating to the sukuk; the feasibility studies of the project; the legal framework for the process of issuing sukuk; the accounting treatment of the sukuk; and how they appear in the budgets of the preparation requirements of the prospectus companies.

Companies in various economic sectors see sukuk as a more attractive financing tool. It enjoys multiple financing formulas commensurate with the various types of projects.

Sukuk are also characterised by their ease of issuance compared to other financing instruments, as they do not require a compatible financial position or creditworthiness for the company issuing the sukuk.

Instead, it is only based on a feasibility study of the project in which the sukuk are issued for the sake of financing it, in addition to the possibility of being financed.

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