Hang Seng's Islamic retail fund draws US$45m
Hang Seng Bank's Islamic retail fund has attracted US$45 million worth of orders, mainly from local retail investors, according to Rosita Lee, director and head of investment products of Hang Seng Investment Management.
Brokers and bankers said the sales figures were not bad but they said if the Islamic fund was only invested in by locals, it would negate the Hong Kong government's intention to develop the city into a centre to capture oil money from Muslims.
Ms Lee, however, believed the fund would eventually be able to expand its investor base to overseas Muslims as her bank would soon team up with financial institutions in the Middle East and Malaysia to promote the fund.
'We have to be patient and I believe the fund - which allows Middle Eastern or other overseas Muslims to invest in high-quality Hong Kong and mainland companies - would be attractive,' Ms Lee said.
Hang Seng Investment Management launched the city's first Islamic retail fund two weeks ago upon getting approval by the Securities and Futures Commission.
The fund was launched right after the government announced its plan to develop Islamic financing in Hong Kong in Chief Executive Donald Tsang Yam-kuen's policy address in October.
The move aims to attract Middle Eastern investors' money that is estimated at between US$700 billion and US$1 trillion.
The Hang Seng Bank's fund product is an index fund based on stocks tracked by the Dow Jones Islamic Market China/Hong Kong Titans Index which includes companies in Hong Kong and the mainland which comply with sharia or Islamic, law.
Sharia places a number of restrictions on investments. For instance, investing in stocks involving tobacco, alcohol, pork-related products, gambling and leisure are prohibited.
Timothy Lo, managing director of French private bank CIC Investor Service, said many private banks would like to use Singapore and Malaysia as a base to invest in the Islamic products as these countries had better facilities to meet the needs of Muslims.
