Hong Kong aims to become a world centre for Islamic finance
HONG KONG: Hong Kong aims to become a world centre for Islamic finance, luring Middle Eastern investors keen to grab a slice of the booming Chinese economy, the city’s financial secretary said Tuesday.
John Tsang said the southern Chinese city was ideally placed to help oil money from the Islamic world get access to infrastructure and other development projects in the mainland. “I believe Hong Kong can play an important role in generating new, reliable and potentially lucrative investment opportunities for this capital,” he told a conference on Islamic Finance here.
The huge demand for capital in the mainland, in particular infrastructure projects, could be funded by Islamic bonds, or Sukuk, which are suited to such large-scale investments, Tsang said.
“Hong Kong can be expected to play a significant role in structuring and financing Islamic investment products to meet the needs of mainland borrowers,” he said.
Tsang said the city’s financial institutions had already begun work on making sure the legal and taxation systems will allow products compatible with Muslim laws.
He added some banks had already started creating products to try and secure part of the worldwide market, which has swelled in recent years to between 700 billion and a trillion US dollars on the back of high oil prices.
Hong Kong’s Chief Executive Donald Tsang announced in his policy address last year that developing Islamic banking would be a priority for the territory. He will make a trip to Kuwait, Saudi Arabia and the United Arab Emirates next week to try and drum up business.
Malaysia is currently the leading global hub for Islamic finance, analysts say, with Indonesia, Pakistan, Thailand and Singapore competing along with Hong Kong. afp
