Daily News Egypt

Banking and Insurance Special: Takaful and the insurance industry

Leaders within the takaful insurance industry have predicted continued high rates of growth within the sector ranging between 15% to 20% over the next several years. This has enabled the sector to secure high profits as demand increases for financial services in Egypt’s banking industry. However, takaful insurance companies also suffer from many of the same problems plaguing commercial insurance companies, such as an overall decrease in the amount of salaries and wages, in addition to other factors associated with the general slowdown of Egypt’s economy. Since 2003, five takaful property insurance companies and three takaful life insurance companies have been established. These companies combined have come to represent nearly 30% of the Egyptian insurance market.

Shura Council seeks national consensus on sukuk

The economic committee of the Shura Council prepared a draft law for sukuk, which differs from the Ministry of Finance’s current project regarding sukuk. According to Saeed Aref, a member of the council’s economic committee, the draft law grants foreigners the right to invest in sukuk usufruct for a maximum duration of 40 years, saying there will be no maximum percentage of ownership. Al-Azhar will be consulted to see the compatibility of the law with Sharia before the end of dialogue sessions, he added.

A reform package for the Islamic banking and finance sector proposed for the new year

Without contradicting the values and practices of Islamic banking, a new regulation is awaited for the Islamic banks. The goal of the legislative reform is to make tools for growth available. This regulation would force non-Islamist banks to comply to the same laws and standards of Islamist banks.

Amin: “IMF may have required Islamic Sukuk”

Galal Amin - author of Whatever Happened to Egyptians and prominent economist - expressed his doubtful attitude towards the new sukuk introduced by the government of Egypt. At a media roundtable held at the American university in Cairo (AUC) on Wednesday, Amin as well as some other experts in economy diagnosed the Egyptian economy and cast their predictions for the current year. It was said that due to political causes of the economic crisis it is difficult to make predictions. Especially the lack of security, a lack of trust and above all the nature and content of political discourse bringing Egypt far beck were mentioned as key factors.

Sukuk draft law released

The final draft of Egypt's sukuk law has been submitted to the finance ministry. It will now be xamined by parliament according to the head of the Egyptian Financial Supervisory Authority (EFSA) Ashraf ElSharkawy. According to ElSharkawy, the goal of the government was social dialogue with political parties and economic associations rather than the EFSA. He further made clear that the sovereign sukuk law released by the government is designed to organise the financing of the government, state budget, national projects and public institutions.

EFSA finalises new sukuk law

The Egyptian Financial Supervisory Authority's (EFSA) draft law regulating Shari’a compliant debt tools has been brought to a final version. The proposition consists of 30 articles which establish a legal framework for the issuance and transaction of sukuk. The purpose of the law is to expand the scope of activities that sukuk can finance. Moreover, it shall allow the issuance of business sukuk.

News of Sukuk issuance agreement creates confusion among Islamist parties

According to an announcement by Samy Khallaf, the Ministry of Finance’s head of the Public Debt Unit, a preliminary agreement on the issuance of Egypt's first sukuk in Islamic markets was made. Ten international investment banks will be involved in the issuing procedures. The sukuk project will be worth between $750 million and $1 billion. The move is dependent on IMF approval of the $4.8 billion loan requested by the Egyptian government.

Read more on: http://dailynewsegypt.com/2012/10/17/news-of-sukuk-issuance-agreement-cr...

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