Samer Choucair: Egypt Is Moving Toward More Innovative Financial Instruments to Attract Long-Term Capital
Investment strategist Samer Choucair said Egypt’s plans to issue its first tax sukuk during the current fiscal year, alongside a study to convert the Egyptian Exchange into a joint-stock company ahead of a potential public listing, represent a shift in financing tools and capital allocation in the Egyptian market.
Choucair explained that both initiatives come amid elevated debt-servicing pressures and efforts to restore momentum to the capital market. He said the developments are not simply about introducing new financing instruments, but form part of a broader effort to reduce funding requirements and improve capital-market efficiency.
This could position Egypt to attract investors seeking stable returns and structural growth in emerging markets.
Tax Sukuk Face the Rising Debt Bill
Samer Choucair noted that debt-interest payments accounted for approximately 71% of total public revenues during the first 11 months of fiscal year 2025–2026, while interest payments reached roughly EGP 2.12 trillion over the same period.
He said these pressures are constraining funding available for development spending and encouraging the search for unconventional financing tools.
Choucair explained that President Abdel Fattah El-Sisi approved a proposal to issue tax sukuk funded by companies and individuals. The value of the sukuk, along with its accrued return, could subsequently be used to settle future tax liabilities.
The Central Bank of Egypt would issue the instruments on behalf of the Ministry of Finance, with maturities of up to one year and a return described as attractive and appropriate.
Choucair said the mechanism aims to raise liquidity upfront from taxpayers rather than relying entirely on traditional borrowing through Treasury bills and bonds, potentially reducing the government’s overall financing needs.
The Egyptian Exchange Faces a New Model
At the same time, Samer Choucair explained that the Cabinet has discussed converting the Egyptian Exchange into a joint-stock company, paving the way for the possibility of publicly listing its shares for the first time.
He noted that the move comes alongside modernization of trading and market-surveillance technology, development of short-selling and derivatives mechanisms, and market-making capabilities.
It also coincides with efforts to encourage private insurance funds to increase their investments in listed equities and investment funds.
Choucair pointed out that the Egyptian Exchange’s market capitalization exceeded EGP 4 trillion in early August 2026, compared with approximately EGP 3 trillion at the end of December 2025—an increase of about 33%.
He viewed the increase as evidence of improved liquidity and stronger investor appetite for Egyptian equities, supported by the government’s privatization and IPO program and tax incentives for listed companies.
Changing the Logic of Public Financing
Samer Choucair said tax sukuk represent a shift away from near-exclusive reliance on conventional debt instruments toward the structured mobilization of future tax resources.
This could reshape demand for domestic government debt and affect the yield curve.
He added that institutional investors will assess the attractiveness of the tax-exempt return relative to other fixed-income instruments, as well as the instrument’s ability to attract liquidity from major corporations and individuals without creating future pressure on tax revenues.
Lessons From the Gulf
Choucair said Gulf-market experiences provide an important reference point, citing the transformation of Saudi Exchange (Tadawul) into a listed entity and its success in establishing itself as a regional platform for equities, debt, and sukuk.
He added that Saudi Arabia continues to lead the global sovereign sukuk market, with domestic and international issuance expanding as part of its debt-management strategy and Vision 2030.
Meanwhile, the Dubai and Abu Dhabi markets have undergone transformations toward joint-stock structures that have strengthened governance and operational efficiency.
Choucair believes converting the Egyptian Exchange into a joint-stock company could open the door to strategic investments from Gulf sovereign wealth funds and asset-management firms seeking exposure to financial platforms in high-growth emerging markets.
Where Is the Money Heading?
Samer Choucair said tax sukuk could give local and international investors access to a short-term, tax-exempt fixed-income instrument, helping diversify portfolios away from their traditional concentration in Treasury bills.
As for a potential listing of the Egyptian Exchange, he said it could enhance transparency and governance while providing an independent valuation of the market operator, similar to the Tadawul model.
He expects institutional capital to focus on banks benefiting from more stable government funding, fintech and non-bank financial-services companies, as well as mid-cap equities that have driven a significant portion of the market’s recent gains.
Risks and Outlook
Choucair warned that bringing future tax revenues forward could put pressure on future collections if it is not accompanied by an expansion of the tax base and improved compliance.
He also noted that converting the exchange would require legislative amendments to the Capital Market Law. He expects those amendments to be approved before the end of 2026, while stressing the need to preserve regulatory independence and the market’s sovereign role.
He emphasized that the success of both instruments will ultimately depend on exchange-rate stability and continued improvement in macroeconomic indicators, including the primary balance and real economic growth, which have recently remained positive.
Samer Choucair concluded that Egypt is moving to align its financial instruments with regional and international standards in an effort to attract long-term capital.
He said the new sukuk and potentially listed shares of the Egyptian Exchange could become important diversification tools for sovereign investment funds and Gulf asset managers.
Ultimately, Choucair said, the ability to offer innovative, transparent financial instruments will be critical in directing investment flows in the years ahead—provided that innovation is accompanied by disciplined execution and continuous monitoring of macro-financial risks.