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Saturday, 15 December 2018

Egypt's new Suez Canal waterway to be funded by investment certificates: PM

Amending earlier announcements, Prime Minister Mahlab indicates that the new Suez Canal waterway will be funded by investment certificates as opposed to shares

Ahram Online, Saturday 16 Aug 2014
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An Egyptian worker takes a rest as he watches bulldozers and trucks at the site of the upgrade project of the Suez Canal, in Ismailia, Egypt, Tuesday, Aug. 12, 2014 (Photo: AP)
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Egypt’s new waterway in the Suez Canal will be funded through investment certificates and domestic debt, announced Prime Minister Ibrahim Mahlab in a conference Thursday.

Investment certificates will be issued to Egyptians only, in local currency for citizens working inside the country and in dollars for those working abroad. The certificates, which will be issued by the National Investment Bank (NIB), will have a lifetime of five years at a 12 percent interest rate to be paid quarterly.

The digging of the parallel waterway, which has already begun, is planned to be accomplished in a year at a cost of $4 billion. The project will also include the construction of six tunnels to link Sinai and the two Suez Canal-bordering governorates of Port Said and Ismailia, at a cost of $8.2 billion.

The announcement followed a meeting between the President Abdel-Fattah El-Sisi and Mahlab, the governor of the Central Bank of Egypt (CBE), and the ministers of international cooperation, finance and investment.

Certificates issued in local currency will be offered in three categories: LE10, LE100 and LE1,000 at a 12 percent interest rate. Those issued in US dollars will be offered at multiples of $1,000 at a three percent interest rate, reported privately owned daily newspaper Al-Youm Al-Sabea, citing Hisham Ramez, CBE governor.

Domestic debt will be gathered through a coalition of local Egyptian banks, private and state-run, added Ramez in interview with Al-Youm Al-Sabea

El-Sisi had announced earlier this month that the project would be funded through an initial public offering (IPO) targeting Egyptians, where the value of the shares would be LE100 per share for those working inside the country and $100 per share for those working abroad.

However, the head of Egypt’s Financial Supervisory Authority (EFSA), Sherif Samy, told Ahram Online at the time that differentials in share pricing was unfeasible and that no company has been created yet for the project to issue shares in.

"Only companies can apply for an IPO, so the new project needs to establish a new company first," added Samy.

An investment certificate is a saving certificate that entitles its holder to receive interest, while a share is a financial instrument giving its holder ownership rights.

The new artificial waterway is planned to be 72 kilometres long and should raise the Suez Canal’s revenues by 259 percent.

The digging process is currently being executed by 33 specialised Egyptian civilian companies, and two army battalions.

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J.M.Jordan
17-08-2014 02:07pm
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2ndSuezChannel investment certificates -correctly- only for Egyptians,
As far as I know, contrary to LongLiveEgypt account at NBE. The number of which isn't ever published either. Though if people don't donate how shall the big projects letting everybody job 16 hours a day come into existence. Try and see what happens if you do what you usually do when wanting to inform yourself.
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Khalid, Suez
16-08-2014 03:27am
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Duplicity of Price
How come the share have different price for different currency? Is it Video economics? shame on our economic professors who do not deserve a penny.
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Sam Enslow
16-08-2014 04:06pm
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Exchange rates
The dollar is considered a more stable currency than the Egyptian pound. That accounts for the differences in interests.
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Omar Habal, Port Said
16-08-2014 03:14am
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Lazy Man
He should regulating the traffic and wearing safety vests. Please call the new canal Port Said Canal.
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Mona Abdel Aziz, Alex
16-08-2014 03:13am
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Where to Buy it?
The banks should advertise about those investment certificates and tell us more about it and where to buy it? shame on our media and public agencies.
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Khofoo, red Sea
15-08-2014 11:59pm
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Geotechnical Issue
the northern part of the canal dig consists of limestone. You should use explosives to breakdown the bedrock followed by clam-shell bucket excavator. there is another way of dig-and-flood as you move forward with the canal. The spoil should be placed on the west side to cover bunkers as added defense security against the savages on the eastern front. Tahya Misr. Yes call the new canal "Port Said" canal.
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Aladdin, Egypt
15-08-2014 08:16pm
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Before too Late`
Will you call the new canal as "Port Said" canal. It will simplify logistics and future job scheduling. Tahya Misr.
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Abdullah, Suez
15-08-2014 08:04pm
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Need to COntribute
Where can we buy the stocks? Stock market and public media should be clear to keep public informed. What bank has the Tahya Misr account and what is its ETF number?
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