ID :
33553
Tue, 12/02/2008 - 15:13
Auther :
Shortlink :
https://oananews.org//node/33553
The shortlink copeid
RIDING THE ISLAMIC BANKING TIDE
From Tham Chou Lin
HONG KONG, Dec 2 (Bernama) -- Last October, Hong Kong Chief Executive, Donald Tsang, announced the island's financial hub would establish itself as an Islamic finance centre.
Last week, the Hong Kong Monetary Authority (HKMA) underlined that, despite
the global financial crisis, the plan was still much on track and "considerable
resources" would be devoted.
"Our priority is to push ahead with the development of an Islamic bond
market. There should be no doubt about our determination to establish a platform
for Islamic finance in Hong Kong," HKMA deputy chief, Eddie Yue, told an Islamic
finance forum.
Hong Kong is looking beyond the current crisis which has reduced sukuk, or
Islamic bond issuance, by 40 per cent in the first three quarters of the year, a
development Yue called "a temporary setback."
What beckons not only Hong Kong but also conventional finance hubs like
Singapore and London is the estimated Islamic assets of US$1 trillion
(US$1=RM3.60) by 2010 and growing annually between 15 and 20 per cent.
Standard & Poor said in September that sukuk issuance was still expected to
exceed US$20 billion this year.
"Although there is an economic crisis, it is comforting to know that
prospects of the Gulf economies remain positive, given the surplus liquidity
created by the huge oil earnings in the past," Datuk Salman Younis, managing
director of Kuwait Finance House (M) Bhd, said.
Malaysia's CIMB Islamic chief executive officer, Badlisyah Abdul Ghani,
brushed aside suggestions of competition, saying that it was overly-emphasised.
"The pie is big enough for more players and it will get even bigger with
the
Islamic economy demanding huge Islamic financing and a global Muslim population
of 1.8 billion.
"You might want to look from a different perspective on how each centre
will
complement each other in developing this greater Islamic market across the
globe, rather than concentrate on competition," he said.
Without Hong Kong, the Islamic financial jigsaw would not be complete,
Badlisyah added.
KFH's Salman said it would be "very difficult" for any country to follow
Malaysia which set up its first Islamic bank in 1983 and now has a full range
of financial products for its Islamic populace.
Hong Kong could leverage on forming strategic alliances with Malaysia, he
added.
Sani Hamid, director for wealth management of Financial Allianc Pte Ltd in
Singapore, also sees plenty of room.
"Hong Kong will be the gateway for Chinese companies to access Middle East
funds, Malaysia is very strong in corporate sukuk, Singapore's venture into
Islamic finance is more towards wealth management and as for Indonesia, it is
more for the domestic market," he said.
Hong Kong has made no secret that just across its borders, China, which
would still grow albeit slower amid the global crisis, would be the hinge
factor.
Hong Kong has also cast its sights on the Gulf region where the
International Monetary Fund estimated some US$800 billion worth of projects were
under way or in the pipeline.
"There are opportunities for us to extend our reach to potential Islamic
investors and financiers in the Middle East and Asia. The addition of Islamic
finance as a new asset class in our financial system will add value to Hong
Kong as a thriving financial centre," Yue said.
CIMB Islamic and another Malaysian bank, Hong Leong, are getting the
headstart to stick a foot into the doorway.
The two are the first institutions in Hong Kong to set up Islamic banking
operations this year, via their local branches, and have signed a memorandum of
understanding for an inter-bank facility known as the Commodity Murabahah
Deposit.
Badlisyah said: "We believe we can contribute our knowledge and skills as a
leading global Islamic finance expert to Hong Kong. We must remember Islamic
finance is not just about the sukuk market, there are many other industry
activities."
KFH too had moved to build a presence in China. It recently signed a US$275
million real estate contract with Hong Kong-listed Nan Hai Ltd for a project in
the southern Shekou and Shenken areas in China.
Yue said HKMA was paying attention to four major areas, namely, to raise
its
profile in the Middle East, to establish infrastructure and conducive policies,
build human capital and encourage the development and launch of Islamic finance
products.
A key priority is to level the tax playing field for Islamic money
transactions.
"The authorities have made a big effort and come on strongly with the
message to tell players that we are going to put in the mechanism to facilitate
you," said Badlisyah, whose bank is the largest sukuk issuer in the world with a
20 per cent share.
The past year has seen the launch of a Dow Jones Islamic Market Index to
track China-linked equities listed on the Hong Kong bourse and an exchangeable
sukuk for a 9.9 per cent stake belonging to Khazanah Nasional Bhd in Hong
Kong-listed Parkson that was 10 times oversubscribed.
Khazanah, the sovereign investment arm of the Malaysian government,
generated US$647 million from the combined issuance of the sukuk, with more than
half snapped up by Middle East investors, and a placement of shares.
HONG KONG, Dec 2 (Bernama) -- Last October, Hong Kong Chief Executive, Donald Tsang, announced the island's financial hub would establish itself as an Islamic finance centre.
Last week, the Hong Kong Monetary Authority (HKMA) underlined that, despite
the global financial crisis, the plan was still much on track and "considerable
resources" would be devoted.
"Our priority is to push ahead with the development of an Islamic bond
market. There should be no doubt about our determination to establish a platform
for Islamic finance in Hong Kong," HKMA deputy chief, Eddie Yue, told an Islamic
finance forum.
Hong Kong is looking beyond the current crisis which has reduced sukuk, or
Islamic bond issuance, by 40 per cent in the first three quarters of the year, a
development Yue called "a temporary setback."
What beckons not only Hong Kong but also conventional finance hubs like
Singapore and London is the estimated Islamic assets of US$1 trillion
(US$1=RM3.60) by 2010 and growing annually between 15 and 20 per cent.
Standard & Poor said in September that sukuk issuance was still expected to
exceed US$20 billion this year.
"Although there is an economic crisis, it is comforting to know that
prospects of the Gulf economies remain positive, given the surplus liquidity
created by the huge oil earnings in the past," Datuk Salman Younis, managing
director of Kuwait Finance House (M) Bhd, said.
Malaysia's CIMB Islamic chief executive officer, Badlisyah Abdul Ghani,
brushed aside suggestions of competition, saying that it was overly-emphasised.
"The pie is big enough for more players and it will get even bigger with
the
Islamic economy demanding huge Islamic financing and a global Muslim population
of 1.8 billion.
"You might want to look from a different perspective on how each centre
will
complement each other in developing this greater Islamic market across the
globe, rather than concentrate on competition," he said.
Without Hong Kong, the Islamic financial jigsaw would not be complete,
Badlisyah added.
KFH's Salman said it would be "very difficult" for any country to follow
Malaysia which set up its first Islamic bank in 1983 and now has a full range
of financial products for its Islamic populace.
Hong Kong could leverage on forming strategic alliances with Malaysia, he
added.
Sani Hamid, director for wealth management of Financial Allianc Pte Ltd in
Singapore, also sees plenty of room.
"Hong Kong will be the gateway for Chinese companies to access Middle East
funds, Malaysia is very strong in corporate sukuk, Singapore's venture into
Islamic finance is more towards wealth management and as for Indonesia, it is
more for the domestic market," he said.
Hong Kong has made no secret that just across its borders, China, which
would still grow albeit slower amid the global crisis, would be the hinge
factor.
Hong Kong has also cast its sights on the Gulf region where the
International Monetary Fund estimated some US$800 billion worth of projects were
under way or in the pipeline.
"There are opportunities for us to extend our reach to potential Islamic
investors and financiers in the Middle East and Asia. The addition of Islamic
finance as a new asset class in our financial system will add value to Hong
Kong as a thriving financial centre," Yue said.
CIMB Islamic and another Malaysian bank, Hong Leong, are getting the
headstart to stick a foot into the doorway.
The two are the first institutions in Hong Kong to set up Islamic banking
operations this year, via their local branches, and have signed a memorandum of
understanding for an inter-bank facility known as the Commodity Murabahah
Deposit.
Badlisyah said: "We believe we can contribute our knowledge and skills as a
leading global Islamic finance expert to Hong Kong. We must remember Islamic
finance is not just about the sukuk market, there are many other industry
activities."
KFH too had moved to build a presence in China. It recently signed a US$275
million real estate contract with Hong Kong-listed Nan Hai Ltd for a project in
the southern Shekou and Shenken areas in China.
Yue said HKMA was paying attention to four major areas, namely, to raise
its
profile in the Middle East, to establish infrastructure and conducive policies,
build human capital and encourage the development and launch of Islamic finance
products.
A key priority is to level the tax playing field for Islamic money
transactions.
"The authorities have made a big effort and come on strongly with the
message to tell players that we are going to put in the mechanism to facilitate
you," said Badlisyah, whose bank is the largest sukuk issuer in the world with a
20 per cent share.
The past year has seen the launch of a Dow Jones Islamic Market Index to
track China-linked equities listed on the Hong Kong bourse and an exchangeable
sukuk for a 9.9 per cent stake belonging to Khazanah Nasional Bhd in Hong
Kong-listed Parkson that was 10 times oversubscribed.
Khazanah, the sovereign investment arm of the Malaysian government,
generated US$647 million from the combined issuance of the sukuk, with more than
half snapped up by Middle East investors, and a placement of shares.
