Post by Sapphire Capital on Aug 20, 2008 8:25:46 GMT 4
HONG KONG: Malaysian lender Hong Leong Bank became on Monday the first bank to be allowed to offer comprehensive Islamic banking services in Hong Kong.
The bank aims to tap the markets of mainland China and West and North Asia through this platform leveraging on Hong Kong’s status as an international financial centre. Islamic banking is based on Sharia, or Islamic law. It requires that gains be derived from ethical and socially responsible investments and frowns on interest-based banking and sectors involving pork, gaming and pornography. Hong Kong’s government has been showcasing the territory as a potential centre for Islamic finance in a bid to attract petrodollars from booming Middle East economies.
“With colossal projects in China like power plants, transmission grids, refineries, pipelines, utilities, ports and LNG facilities in the offing, Hong Kong can attract sharia compliant financing structures,” said Yvonne Chia, CEO of Hong Leong Bank.
Julia Leung, Hong Kong’s undersecretary for financial services and treasury, said Hong Leong’s launch showed that Islamic banking was compatible with Hong Kong’s regulatory framework.
A study last year on developing an Islamic financing platform in Hong Kong found that tax laws needed to be changed or clarified to provide a level playing field for the issuance of sukuk, or Islamic bonds. That exemption could benefit borrowers like Hong Kong’s Airport Authority, whose chief executive said the airport operator intends to sell sukuk to raise funds.
Media reports have also named Hong Kong Mortgage Corp and railway operator MTR Corp as possible borrowers. “Preparation is actively in place for the introduction of Hong Kong’s first sukuk in the fourth quarter,” Leung said.
Initially Hong Leong will offer a murabahah security, a product which is based on a price mark-up structure and helps in liquidity management. The bank also has plans to offer products with sharia structures like ijara, mudaraba and musyarakah. Ijara is based on leasing, mudaraba on profit sharing and musyarakah on partnership.
Tuesday, August 19, 2008, source: Daily Times
www.dailytimes.com.pk/default.asp?page=2008\08\19\story_19-8-2008_pg5_22
The bank aims to tap the markets of mainland China and West and North Asia through this platform leveraging on Hong Kong’s status as an international financial centre. Islamic banking is based on Sharia, or Islamic law. It requires that gains be derived from ethical and socially responsible investments and frowns on interest-based banking and sectors involving pork, gaming and pornography. Hong Kong’s government has been showcasing the territory as a potential centre for Islamic finance in a bid to attract petrodollars from booming Middle East economies.
“With colossal projects in China like power plants, transmission grids, refineries, pipelines, utilities, ports and LNG facilities in the offing, Hong Kong can attract sharia compliant financing structures,” said Yvonne Chia, CEO of Hong Leong Bank.
Julia Leung, Hong Kong’s undersecretary for financial services and treasury, said Hong Leong’s launch showed that Islamic banking was compatible with Hong Kong’s regulatory framework.
A study last year on developing an Islamic financing platform in Hong Kong found that tax laws needed to be changed or clarified to provide a level playing field for the issuance of sukuk, or Islamic bonds. That exemption could benefit borrowers like Hong Kong’s Airport Authority, whose chief executive said the airport operator intends to sell sukuk to raise funds.
Media reports have also named Hong Kong Mortgage Corp and railway operator MTR Corp as possible borrowers. “Preparation is actively in place for the introduction of Hong Kong’s first sukuk in the fourth quarter,” Leung said.
Initially Hong Leong will offer a murabahah security, a product which is based on a price mark-up structure and helps in liquidity management. The bank also has plans to offer products with sharia structures like ijara, mudaraba and musyarakah. Ijara is based on leasing, mudaraba on profit sharing and musyarakah on partnership.
Tuesday, August 19, 2008, source: Daily Times
www.dailytimes.com.pk/default.asp?page=2008\08\19\story_19-8-2008_pg5_22