Securitization bond issuance in Egypt to hit LE25B in 2020

CAIRO – 13 December 2020: Volume of securitization bond  issuance in Egypt amounted to about LE 15.7 billion by the end of November 2020, according to Head of the Egyptian Financial Regulation Authority Mohamed Omran.

Omran added Sunday that the volume of securitization bond issuances is expected to reach 25 billion by the end of 2020, with an increase of 14 percent compared to 2019 if companies finish completing the documents before the end of the year.

He emphasized that the annual indicators of securitization bonds are witnessing a remarkable development starting from 2019, following the amendments made to the Capital Market Law No. 95 of 1992 that led to the recovery of the bond market to provide an unconventional alternative to financing for companies.

He explained that the value of securitization bond issuances amounted to more than LE 22 billion in 2019, compared to only LE 5.3 billion in 2018.

In 2018, Egypt’s Parliament ratified the amendments of the Capital Market Law that aims to increase competitiveness and create a more inclusive economic climate. These amendments included offering more protection to minority stakeholders, especially in acquisition cases. It gives the power to the Egyptian exchange to lower the registration fees in case of small businesses and encourage small companies to compete in the market. 

The law also introduces Sukuks to the exchange market. Sukuks are bonds that are compliant with the Sharia law and put the foundation for establishing a union for securities companies.