PM approves amendments to Capital Market Law to attract investments

Doaa A.Moneim , Tuesday 8 Sep 2020

Egypt's Prime Minister Mostafa Madbouly gestures during a news conference in Cairo, Egypt. REUTERS

Egypt's Prime Minister Mostafa Madbouly has issued a decree amending the regulations of the Capital Market Law, which is the largest amendment to be applied in this regard since November 2018, chairman of the Financial Regulatory Authority (FRA) Mohamed Omran announced on Tuesday.

The new amendment allows private property funds to provide finances for projects, which should support stalled projects and pave the way for individual projects and companies to be joint-stock companies, qualifying them to be listed on the stock market.

The amendment also encourages providing finances for small and medium-sized projects depending on the issuance of bonds by decreasing capital limits for the companies that are responsible for credit rating these bonds for such projects, according to Omran.

The amendment also includes setting prices for purchasing non-active shares according to the fair value concept, and providing more flexibility for real-estate investment funds to implement their venture policies.

The amendment also includes new forms of sukuk issuances, which have been approved by Al-Azher, for the sake of diversifying investment instruments, said Omran.

These include industry sukuk, agent-investment sukuk, and farm sukuk, according to Omran.

Egypt’s government is working on adopting a number of economic measures that target the containment of the COVID-19 pandemic’s impacts on the national economy and to protect the fruitful results of the country’s economic reform program.

It also increased the public investment allocations in the current FY2020/2021 budget, which caused the budget to reach EGP 2.2 trillion, the largest in Egypt’s history.

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