Before bringing into effect the sukuk law, the Egyptian policy makers shall consider a number of issues such as how to calculate the rate on sukuk, the guarantee offered to investors that can be hypothecated and the availability of the market-maker mechanism which enables the sukuk holder to sell it at any time, said Mohamed Ashmawy, chairman of United Bank.
On the sidelines of a symposium held at the Islamic Economics Center of the United Bank about the “Sovereign Sukuk Draft Law”, Ashmawy noted that the United Bank has coordinated with Faisal Islamic Bank of Egypt, Al Baraka Bank of Egypt and Abu Dhabi Islamic Bank to guarantee the success of the new instrument.
He revealed that the first sector that the government aims at financing through sukuk is the mining sector. He then denied what is being said by some media that foreign investors will acquire the state’s sovereign assets through sukuk. Investors will only contribute to financing the projects through sukuk and will share the profits and losses, he explained.
The legitimate side of the sukuk draft law is agreed on by all parties, but the technical aspects and implementation mechanisms shall be concurred on, he added.
Sukuk will make the country do its main role which is being a market maker and creator of investment opportunities rather than an owner of investment projects. The country will still acquire a controlling stake in these projects.
Ashmawy affirmed that the news circulated about hypothecating the Suez Canal through sukuk is groundless as the country aims at improving this region: along the Canal’s cities, Damietta and Alexandria. UEA is one of the main countries which are ready for investing in this region so as to promote trade movement and services in Dubai.
