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.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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