HK strengths cited in Islamic IPO hub bid

PUBLISHED : Thursday, 19 February, 2009, 12:00am
UPDATED : Thursday, 19 February, 2009, 12:00am

Hong Kong can take advantage of its strengths as the region's leading centre in new listings to develop Islamic initial public offerings, Eddie Yue Wai-man, a deputy chief executive of the Hong Kong Monetary Authority, said.

Speaking at a financial seminar yesterday, Mr Yue said the city could be innovative in Islamic finance, exploiting its special strengths, such as close affinity to the mainland and its status as a hub for international fund-raising and asset management and a testing ground for the mainland's financial liberalisation.

'There's no obstacle to Hong Kong's becoming a centre for Islamic IPOs, given our distinct record as a leading IPO centre in the region,' he said. 'Now is the time to lay down the groundwork for future development.'

Billy Mak Sui-choi, an associate professor in the department of finance and decision science at Hong Kong Baptist University, said Hong Kong could attract mainland firms planning to list in the city to structure the deals in a way that met Islamic rules.

Mr Mak said there could be demand for Islamic products even in current market conditions, as some people in Islamic countries still needed to manage their wealth.

'But Hong Kong has to make sure it has sufficient calibre for the development of Islamic finance,' he said.

Mr Yue said that although the growth of Islamic finance slowed last year amid the global credit crunch and adverse economic conditions, the potential remained robust.

New sukuk (Islamic bond) issuance fell 54.84 per cent last year to US$14 billion, with growth in Islamic banking assets expected to shrink.