The Finance Ministry and the EGX are preparing to activate a secondary market for sovereign sukuk, a senior government official tells EnterpriseAM. The move to shift sukuk from the primary market to open exchange trading is designed to maximize returns and attract fresh liquidity as Egypt’s Islamic finance market matures.

Why it matters: Egypt’s EGP 200 bn sovereign sukuk program has seen softened demand lately, with yields at 21% trailing the 25–26% offered by conventional debt, following seven issuances since the program’s launch last November.

Listing sukuk for trading will not impact the state’s ultimate ownership of the underlying assets, such as the Ras Shukeir land plot backing the current program, according to our source. The assets underpinning the issuance will not be transferred or the ministry’s right to reclaim the assets at maturity limited, with only the usufruct rights transferred for the duration of the sukuk.

The ministry also plans to introduce a variable-rate sovereign sukuk to broaden the investor base, in line with its broader debt strategy to reduce borrowing costs and extend the average maturity of public debt to 4.5–5 years, up from the current 1.7 years.

The local sukuk program is also expected to be extended through FY 2026-27, alongside new instruments like fractional, zero-coupon, and fixed-rate bonds.

Egypt is also planning to return to the international bond market in the coming period, with a target of USD 2–2.3 bn in the first half of 2026, our source told us. The move follows a tactical delay of an issuance originally planned for February, which the Finance Ministry put on hold to wait out a period of global market volatility to secure better pricing.

We should also soon see the launch of the country’s first ever retail bonds in the first six months of the year, allowing individuals to invest in government debt instruments without having to go through intermediaries, we were told.

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