Latest from GIFC

Monday, 10 September 2007

Hong Kong seeking slice of trillion- dollar Islamic finance, Tsang says

HONG KONG (Thomson Financial) - Hong Kong wants a slice of the 1 trillion US dollar Islamic finance market and is taking steps to develop a local Islamic bond market, Financial Secretary John Tsang said Monday. 'Islamic finance is an important element of the global financial system. For Hong Kong to be a major international financial center, not just in the region, but globally, then Islamic finance must be among our portfolio of products and services,' Tsang told financial executives attending the annual conference of the Hong Kong Investment Funds Association in the city. Hong Kong officials have visited the Middle East and most recently Malaysia to learn more about Islamic finance, Tsang said. Malaysia, so far, is the most active country in the region to lure funds from the oil-rich Middle East. It is now considered as the world's largest issuer of Islamic debt. 'We believe Islamic finance will become another engine of growth in the coming years. Globally, the Islamic financial market is worth an estimated 1 trillion US dollars, and is expected to grow by 15 percent annually,' Tsang said. Investors from the Middle East who are interested in tapping the Chinese market can use Hong Kong as a launching pad for such plans. China, whose economy has been growing at double-digit levels in the last few years, is attracting investors worldwide, lured by its growing number of wealthy consumers with a lot of cash to spend. 'Many investors in the Middle East are already eyeing opportunities in the Chinese market. In this connection, Hong Kong is the best place to be the most effective intermediary for structuring and marketing Islamic investment products to meet the needs of Mainland enterprises and Middle Eastern investors,' Tsang said. China's economy expanded at an annual rate of 11.9 percent in the second quarter, the fastest pace in 12 years. The Asian Development Bank predicts the Chinese economy will grow 11.2 percent this year and 10.8 percent in 2008. 'To take the matter forward, our financial regulators will look at ways to develop a local Islamic bond market under our existing financial, legal and regulatory regimes,' Tsang said. 'Reconciling our system of modern finance with Islamic finance will be a key objective.' During the first seven months of the year, foreign direct investment in China rose 12.2 percent to 36.93 billion US dollars, according to the Ministry of Commerce's web site. Cash-rich countries from the Middle East such as Dubai, United Arab Emirates and Saudi Arabia are not yet among China's top 10 foreign investors, the data showed. 'It makes a lot of sense for Hong Kong to try to attract petrodollars,' said Daniel Chan, senior investment strategist at DBS Bank in Hong Kong. 'Hong Kong already has the infrastructure to serve this purpose. All it needs to do is study the Malaysian model of handling Islamic finance, especially on the aspect of interest,' Chan said. Under the Islamic legal code, paying interest is forbidden. Malaysia is offering tax breaks for offshore banks setting up Islamic finance businesses in the country. HSBC, Citibank, DBS and other top global banks are already offering products and services geared toward this market, Chan said. 'As an international finance center, Hong Kong should be able to attract these funds, particularly those eyeing the Chinese market,' Chan said. - (10 Sep 07)
(1 US dollar = 7.80 Hong Kong dollars)
Alfalah Consulting - KL: 
Islamic finance consultant: 
Islamic Investment Malaysia:

No comments:

Upcoming Events on Islamic Finance, Wealth Management, Business, Management, Motivational Alfalah Consulting, KL-Malaysia:


Register Online . Register Today

Islamic Financial Planning & Wealth Management by Ahmad Sanusi Husain