‘Wait-and-see’ game about Egypt

Islamic financial institutions in general are playing a “wait-and-see” game regarding Egypt, one of the laboratories of the contemporary Islamic finance movement and currently in political and economic transition with elections - both parliamentary and presidential - due later this year.

This despite the fact that in June the board of directors of the Egyptian Financial Supervisory Authority (EFSA) approved a proposal to amend the Executive Regulation of Capital Market Law No. 95 of 1992 regarding the rules governing issuing and trading in sukuk, in other words the law is in the process of being amended to facilitate the issuance of sukuk primarily to aid economic development and investment in the country. However, any substantive developments including their final approval of the Capital Market Law amendments will fall to the future government that is poised to be elected following the upcoming elections.

However, Dubai-based leading Islamic finance consultancy, Amanie Advisors, headed by prominent Shariah scholar and now entrepreneur, Daud Bakar, is not hanging around and is keen to capitalize on a first mover advantage. Amanie last week opened a new office in the Egyptian capital, Cairo, to complement its business in Malaysia, Dubai and Luxembourg, where it maintains offices. The office aims to capitalize on the considerable business potential in Egypt and North Africa advising bankers and fund managers about the principles of Islamic finance.

According to Amanie Advisors, there is already approximately $52 billion invested in Shariah-compliant investment funds on a global basis and an estimated $1.6 trillion of Islamic assets under management by 2012. "Demand for financial services in Egypt is growing rapidly, with a marked preference by many in the country for a Shariah-compliant financial alternative. We believe that our training and advisory services will be much sought after among asset managers and bankers. Many bankers require training and advice on how to structure Islamic Finance products. We are looking forward to working with many financial institutions and individuals in the Islamic finance space in Egypt and the broader North African region," emphasized Bakar, a Malaysian scholar who gained his qualifications from Kuwait University and the University of St. Andrews in the UK.
Bakar is also the Chairman of the Shariah Advisory Committee of Bank Negara Malaysia, the central bank, and sits on the board of several financial institutions and agencies in Asia, the Middle East and Europe.