Capital Markets Act amendments credit positive for banks -Moody’s

Amendments to the Capital Markets Act that pave the way for the launch of new financial products are credit positive for Egyptian banks, according to Moody’s Credit Outlook. The amendments “will deepen the financial markets in Egypt by facilitating sukuk issuance and investors’ ability to hedge, making the country a more appealing investment destination to foreign investors. The amendment is credit positive for banks because the increased capital markets activity will raise banks’ income from their debt capital markets business while also providing funding options.” Moody’s are also of the view that banks will likely lose loan business as the largest corporates will “begin to finance their operations through the yet-to-be-developed debt markets,” but that increased lending to SMEs will support loan growth.