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Monday, 6 August 2007

Hong Kong to tap growing demand for Islamic finance

AS Asia’s financial hub, Hong Kong aims to tap the growing demand for Islamic financing by collaborating with Malaysia, which has vast experience in developing the sector, its Financial Secretary John C. Tsang said today. “It (Islamic finance) is an additional instrument any major financial centre should have to deepen and broaden its market (by offering its clients more options). At the end of the day, people are looking for the best returns and this is one way of doing it,” he told a press conference in Kuala Lumpur today. Tsang said there are a lot of interests not only from Muslims for Islamic financial instruments but also non-Muslims.“In particular, HK, whose Islamic finance is in its infancy, is keen to learn about Islamic bond,” he said.This is Tsang first official visit outside HK after taking over financial secretary on July 1.Earlier, he had a meeting with Second Finance Minister, Tan Sri Nor Mohamed Yakcop. He also met Deputy Finance Minister, Datuk Dr Ng Yen Yen, on the sidelines of the Apec finance ministers meeting. Tsang will also be meeting Bank Negara Malaysia’s Governor Tan Sri Dr Zeti Akhtar Aziz.Tsang said HK needs assistance in Islamic legal and accounting system.“We are looking at an Islamic bank per say,” he said, adding that he also had a luncheon meeting with leaders of banking industry in Malaysia. He said HK, as a financial centre, is never short of liquidity and investors can tap it for investments.Asked on Iskandar Development Region, he said if it was commercially viable, HK, which has extensive experience in investing in specialised economic zone such as Shenzhen in China, would look into it. Tsang said HK is working on delivery versus payment (DVP) arrangement with Malaysia, which would be put in place by this November.DVP is a securities industry procedure in which the buyer’s payment for securities is due at the time of delivery. Security delivery and payment are simultaneous. — (Bernama, 6 August 07)

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