Dubai, Hong Kong ink deal to boost Islamic finance

ISLAMIC HUB: Dubai and Hong Kong are formed two working groups to help boost the latter's Islamic finance credentials. (Getty Images)

Dubai and Hong Kong have formed two working groups to help boost China's special administrative region as a centre for Islamic finance in the Asia-Pacific region, UAE daily Khaleej Times reported on Monday.

The groups aim to developing the financial market infrastructure of both countries as well as their Islamic finance capabilities, said Eddie Yue, deputy chief executive of the Hong Kong Monetary Authority (HKMA).

"Our objective is to make Hong Kong the centre for Islamic finance in the Asia-Pacific region," said Yue on Sunday in Dubai.

"Therefore, we are not positioning ourselves as a market that can match the supply of Islamic products from the Islamic world with the demand from the local community in Hong Kong."

Yue was part of a delegation of officials from HKMA, the Treasury Markets Association and the Hong Kong Trade Development Council who were in Dubai to promote Hong Kong as the gateway to China for sharia compliant financial products.

The global Islamic finance market is one of the fastest growing in the world, but Hong Kong and China have had relatively little impact as yet in the market.

No sukuk, or Islamic bonds, have been in Hong Kong or China, whilst $150 billion have been issued in the global market since 2006.

Afaq Khan, CEO of Standard Chartered's Saadiq Islamic banking division, also said that 160 projects, worth $198 billion, had received sharia compliant financing over the past two years compared to one in China and another in Hong Kong.

In the same market, 170 Islamic funds had been issued for the period against one issued in Hong Kong.

Martin Wheatley, the CEO of Hong Kong's Securities and Futures Commission, said China is experiencing powerful growth with $2.7 trillion in savings deposit as at end-March and $1.7 trillion in foreign exchange reserve.

Hong Kong has the seventh-largest stock market in the world and the third in Asia in terms of market capitalisation, which reached $2.34 trillion as at end-February, he added.

Both these attributes give China the potential to play an "intermediary role for Islamic financial products" as it does for conventional products, such as debt, equity, money market, asset management, banking and insurance, Weatley said.

Globally, Islamic assets are growing at an annual pace of 20% and are set to hit $2 trillion in 2010 from the current $900 billion, largely thanks to a flood of petrodollars, Ernst & Young said in February.

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USER COMMENTS (3 COMMENTS)

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Hong Kong is NOT a Racial Society
Posted by Klaus Koehler, Hong Kong, China on 28 May 2008 at 14:16 UAE time


We help a lot of Middle East companies (www.klakogroup.com) who want to start a business in China to establish them in Beijing / Hong Kong / Shanghai / Shenzhen. Hong Kong is now THE very International Asian City and english is the major business language. All International Banks are present as well as lawyers in each field.

Are you talking about Hong Kong?
Posted by Shariahsender, New York, USA on 20 May 2008 at 23:56 UAE time

Sounds like you have lived in Hong Kong too long and have developed myopic vision, friend. If you step back and look at Hong Kong and what it means for the global markets to attract Islamic finance two things are apparent.

One: reaching out to the Islamic and Arabic world is definitely not a sign that Hong Kong is racist and xenophobic.

Two: the government may be creaky and as ill-fitting as any government, but Hong Kong is clearly taking steps to be more international.

When I lived there, Hong Kong hosted several South Asian and Muslim leaders. It was, after all, the location of Anwar Ibrahim's first speech after he was released from prison. it was also the place that the current president of the Philippines sent her family during a coup attempt.

Hong Kong is not as closed as you would think. You may have to get over some of your own prejudices and fears, I think. Our own fears are what limit us and the way we do business.

http://www.shariahfinance.blogspot.com

Hong Kong - Insular , Racial Society
Posted by Tajammulhusain, Hong Kong, Hong Kong on 14 May 2008 at 10:23 UAE time


In order to attract Islamic Finance Hong Kong needs to shed its
parochial.insular,racial attitude towards south asians , mainly , muslims.Its ill-conceived superiority coupled with utter ignorance vis-a-vis south asians , arabs ( legacy from colonial past ) needs to rectified.Its high time they encounter,interact with the world beyond west, which is losing its pre-eminence very fast.Just claiming to be a cosmopolitan world city is self-delusional , self-defeating.

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