Huge potential for Islamic banking in Hong Kong

Report says Hong Kong has the advantages to become a major Islamic financial hub.

A report issued by KFH-Research said that among Hong Kong’s advantages are its high liquidity, the presence of many foreign banks, its free economy and simple tax structure. Hong Kong is also a vital gateway to China and its vast market.

Sources said Hong Kong has been increasing in importance as a center of Islamic finance in the last four to five years. It would have done advanced further by now were it not for the global financial crisis and would have enacted laws and regulations for Islamic product offerings.

The Arab Chamber of Commerce and Industry was established in Hong Kong in 2006 to promote commercial ties and greater economic and bilateral cooperation between Hong Kong and the Arab world. The chamber provided a platform for trade links and increased business understanding.

In July 2008, the International Islamic Mediation & Arbitration Centre was set up in Hong Kong as an independent international institution in consultation with the International Chamber of Commerce. Among its main objectives are to facilitate mediations and arbitrations and promote international commercial arbitration

In September 2012, the Axiata group of Malaysia successfully launched a two-year US$160 million sukuk in which Hong Kong investors took a share of 55%. The sukuk was oversubscribed 3.5 times.