RSSNewsletterSiteMapFeedback

Home · Weather · Forum · Learning Chinese · Jobs · Shopping
Search This Site
China | International | Business | Government | Environment | Olympics/Sports | Travel/Living in China | Culture/Entertainment | Books & Magazines | Health
Home / Business / Finance Tools: Save | Print | E-mail | Most Read | Comment
Saudi Arabia diplomat bats for Islamic bonds
Adjust font size:

Islamic finance, which has been approved as a profitable investment option in global market, will immensely benefit Hong Kong, Consul-General of Saudi Arabia in Hong Kong Alaudeen A. Alaskary told China Daily.

 

"As a well-established international financial hub, it is about time for Hong Kong to launch Islamic bonds to catch up with the rest of global financial markets," Alaskary said.

 

"And Hong Kong will benefit a lot from the financial instrument, for it has been approved to be easier to handle, more profitable and more stable than many other financial instruments," he said.

 

Shariah-compliant sovereign and corporate Islamic structured financial instruments, known as Sukuk or Islamic bonds, are a form of commercial paper that provides an investor with ownership in an underlying asset. It is an asset-backed securities that has a stable income and Shariah-compatible trust certificates.

 

Because of the nature of the securities, Sukuk has been developing at a remarkable pace since its inception three decades ago.

 

The number of Islamic financial institutions worldwide has risen from one in 1975 to more than 300 at the end of 2006 in more than 75 countries and regions, with total assets estimated to exceed US$1 trillion.

 

In his policy address last month, Chief Executive Donald Tsang called for the development of an Islamic bond market in Hong Kong to tap Islamic funds, which is worth between US$700 billion and US$1 trillion and expected to grow at 15 percent per year.

 

Financial Secretary John Tsang also urged regulators to study how to reconcile Muslim financial rules with local laws to launch a market compatible for Islamic bonds.

 

"Islamic finance is an important element of the global financial system," said the finance chief. "For Hong Kong to be a major international financial center - not just in the region, but globally - Islamic finance must be among our portfolio of products and services."

 

Alaskary said the Shariah-compliant requirement will not make Sukuk less attractive compared with other bonds.

 

"I think they are regulations rather than restrictions. All bonds have their rules, so is Sukuk," Alaskary added.

 

Islamic finance is governed by Islamic law, or Shariah, which bans the collection of interest, trading in risk and investing in gambling, pork, bars and alcohol-related businesses. All are components in virtually every global market.

 

While conventional bonds are based on the legal relationship between borrowers and lenders, Islamic bonds are structured as business transactions. Instead of issuing interest, they revolve around rental payments and dividends.

 

Charles Li, a finance professor at the City University of Hong Kong, said Hong Kong authorities must be careful in balancing local financial norms and Islamic financial regulations.

 

"The government should study whether our laws are in conflict with Middle-East banking systems and laws," Li said.

 

(China Daily November 22, 2007)

 

Tools: Save | Print | E-mail | Most Read

Comment
Username   Password   Anonymous
 
China Archives
Related >>
Most Viewed >>
-China set to hit the brakes on rising yuan
-Power to resume shortly in worst-hit area by snow
-Macao's gaming market expands further
-Online operators are on top of the game
-Insurance firms set to stump up billions

May 15-17, Shanghai Women's Forum Asia
Dec. 12-13 Beijing China-US Strategic Economic Dialogue
Nov. 27-28 Beijing China-EU Summit

- Output of Major Industrial Products
- Investment by Various Sectors
- Foreign Direct Investment by Country or Region
- National Price Index
- Value of Major Commodity Import
- Money Supply
- Exchange Rate and Foreign Exchange Reserve
- What does the China-Pakistan Free Trade Agreement cover?
- How to Set up a Foreign Capital Enterprise in China?
- How Does the VAT Works in China?
- How Much RMB or Foreign Currency Can Be Physically Carried Out of or Into China?
- What Is the Electrical Fitting in China?
SiteMap | About Us | RSS | Newsletter | Feedback

Copyright © China.org.cn. All Rights Reserved E-mail: webmaster@china.org.cn Tel: 86-10-88828000 京ICP证 040089号