IMF warns Morsi declaration could stall loan to Egypt

The International Monetary Fund claims, the political instability as well as the stability of state institutions in Egypt could delay the financial injection in value of $4.8bn loan from the fund.

Investment recovering in Arab Spring economies

Last month, two UAE real estate developers - Al Futtaim Group and Emaar Properties - announced a big project in Egypt. Not only was this a boost to the country’s property market but it also acted as a sign of a revival of cross-border investment in the region. According to the two companies, they plan to invest about 5bn Egyptian pounds ($820m) in building the "Cairo Gate" which will be situated off the Cairo-Alexandria desert highway. The complex will be 65 hectare big and will be build around a shopping mall. An office park, a luxury hotel, schools, medical facilities and residential space are included in the plan.

Islamic crowd funding portal launched in Egypt

The new web portal that launched in Egypt claims to be the first crowd funding service in the country subject to the principles of Islamic finance. The portal enables a huge number of investors to become shareholders in a project. In order to that, they will need to contribute only very small amounts of money and will not have to go through stock exchange. Co-founder of the portal Shehab Marzban explains that micro-projects and larger projects are funded by banks. However, projects worth between $50,000 and $300,000 need to find another source of funding. The portal is aimed to bridge this gap.

Islamic crowd funding portal launched in Egypt

A new internet portal, which was recently launched in Egypt, is said to be the first crowd funding service in the country compliant with the principles of Islamic finance. Through cloud funding, numerous investors will be able to participate as shareholders in a project by contributing very small amounts of money. Going through a stock exchange will not be necessary. According to Shehab Marzban, co-founder of, the portal is aimed at smaller projects needing between $50,000 and $300,000 and for which there are no banks taking care of funding. The idea of the website is to bridge this gap and to gather creative people an investors in order to fund ideas and projects.

National Bank for Development signs up to Standard Chartered's Islamic Euro Nostro Product

In cooperation with Abu Dhabi Islamic Bank Group, Egyptian National Bank for Development (NBD) signed up to Standard Chartered Bank's Islamic Euro Nostro Account. Using this Nostro product, NBD will be able to earn Shariah-compliant profits on its account balances at Standard Chartered Bank Germany Branch in Frankfurt. The agreement was made at SIBOS 2012 in Osaka, Japan. The main feature of the Standard Chartered Saadiq EUR Nostro Account is that it utilises a Shariah-compliant account sweep facility. Available EUR balance in NBD's Saadiq clearing account will be used for investment using the Islamic finance mode of Murabaha at the end of each business day.

Egypt: Nation Considers Sukuk to Redress Budget Deficit

Egypt's Investment Minister - Osama Saleh - announced three days ago that the government discusses the issuance of sukuk in order to redress the state budget deficit. A work group is already formed. It consists of ministries of investments and finance and the Central Bank of Egypt to set Sukuk legal structure. Currently, the ministry is preparing to inaugurate projects affiliated to the public sector in different fields in Upper Egypt.

In economic flux, Islamic banking and finance are gaining ground

The past year and a half were marked by economic stagnation which has affected numerous businesses. However, some Egyptian Islamic investment banks have a vision on how to act in the new emerging order. For example, Ridge Islamic Capital, has found a niche in the finance sector and intends to capitalize on it. The portfolio of the investment bank includes Sharia-compliant investment banking, asset management and wealth management services. Their target market is, according to experts, primarily for Islamic finance.

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Egypt’s Savings Vacuum Shows Struggle for Banks: Islamic Finance

According to data from World Bank, nine out of ten adults in Egypt do not have a bank account because they rarely have excess money to put in and do something with it. With a little number of clients, promoting Shariah- compliant financing is quite problematic. In order to enable the growth and profit of Islamic banking in the nation constituted mostly of Muslims, the Egyptian President Mohamed Mursi neesd to lift the country's economic growth from 2011’s 19-year low of 1.8%. New laws increasing the share of Shariah-compliant deposits from the current 6% and enabling borrowers to sell bonds in accordance with Shariah principles are being prepared by the President.

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Does Islamic finance have a responsibility to reduce unemployment

According to expectations, financing SMEs shall be a measure to deal with unemployment in the MENA region. Reports suggest rapid growth of the market share of Islamic banking in Egypt due to the change in public policy. Smaller markets such as Oman and Morocco are also considered important in this context. Observers point out that Islamic finance is a potential source of spurring economic growth in the countries which experienced the Arab Spring. However, it is highly doubtful whether Islamic finance can solve the unemployment issue especially among young people. The question is rather if it should make conscious efforts to contribute to dealing with unemployment as part of its business strategy instead of a byproduct of its activities.

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.

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North Africa set to play major role

Notable growth in the takaful industry from Islamic countries in North Africa is expected due to the changes in the political environment there. Islamic governments in countries like Libya, Tunisia and Egypt will most probably make a huge contribution to the global takaful market. Needless to say, conventional insurance will be overruled. With $11.8 million, the African takaful industry already ranks third worldwide.

Sukuk a solution to Egypt’s economic crisis

Last month the intention of issuing one or two rounds of sukuk by the end of this year by the Egyptian government was announced. The business community has a prevailing positive attitude towards the idea. Now the Egyptian government is busy figuring out the details of the proposal. Establishing rules to govern the issuance of sukuk are to be discussed.

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EFG to sell QInvest joint venture stake next year, Arqaam says

According to Arqaam Capital Ltd, EFG-Hermes Holding SAE plans to sell its 40% stake in 2013 in the investment bank it is forming with QInvest. Thus, it will turn into a holding company. EFG-Hermes' assets will be held in Lebanese unit Credit Libanais SAL and in a private equity unit managing $980 million (Dh3.6 billion).

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Barclays Weighs Islamic Finance Products in Egypt to Boost Sales

According to a senior bank official, Barclays Bank Egypt SAE discusses involving in the Egyptian Islamic banking market and to increase loans to small and medium businesses. Thus, the bank intends to implement new ways to generate revenue. Replication of its South African Islamic products in Egypt is one of the main topics considered. Since SMEs provide 70% of the country's economic growth, Barclays Bank have been examining in detail lending to SMEs for the last two years.

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Islamic Development Bank to lend Egypt US$330 million

The International Islamic Trade Finance Corporation, which is affiliated with the Islamic Development Bank, is giving Egypt a loan worth US$1.2 billion in total. The loan aims to provide basic and strategic commodities. The second part of this loan, US$330 million, is being prepared by several local and regional banks. It is intended to be used for importing wheat and food commodities.

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Egypt Salafis Lured as IMF Aid Beats AA Debt: Islamic Finance

An Egyptian professor of Islamic studies claims, it is allowed for Muslims to borrow non Shariah-compliant options, if there is an extreme need. However there are ultra-orthodox voices saying that such loans are violating Islam's beliefs. In their opinion Islamic countries should decry loans from International Monetary Fund and search other ways of covering debt.

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Egypt to receive USD 235m loan from Intrnational Islamic Trade Finance Crop.

International Islamic Trade Finance has granted a credit to Egypt worth USD 235m. This financial package should help to the state-run Egyptian General Petroleum Corp. to secure country's commodity supply. The Egyptian Ministry of Finance will assume responsibility for paying back the credit, in case if the Egyptian General Petroleum Corp. cannot perform obligations under the contract.

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Islamic investment bank in Egypt wants to buy brokerage

Since Ridge Islamic Capital wants to be able to offer a full range of sharia-compliant financial services in Egypt, it is looking for a local brokerage to buy. Such an initiative would be a part of its expansion plan. The company's intentions are to start providing sharia-compliant brokerage services during the last three months of 2012. The brokerage they are looking for should have a solid reputation and a track record. Potential candidates and deal size have not been made known so far.

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Egypt-based Islamic finance firm eyes $100m investment

Ridge Islamic Capital announced it had $100 million which will be used to raise the company's capital and invest in funds over the next two years. Thus, it aims to tap a growing market for Islamic finance. The launch of Ridge Islamic Capital took place after Ridge Solutions International Holdings acquired El Rashad.

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Ridge Islamic Capital announces official launch of its activities in Egypt

At a recent press conference, Ridge Islamic Capital announced its official inauguration and launch of its activities in the Egyptian market. The company plays the role of a moderate solution between modern investment banking and traditional Sharia compliant commercial banking. The launch will be a milestone in providing Sharia compliant solutions in the region and is expected to raise the company's revenues and its investors and shareholders' value.

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