Legislators raise concern over Islamic bond issue
Government questioned on costs and demand in view of small Muslim community in city
Lawmakers are questioning the government's plan to issue Islamic bonds, saying the costs are expected to be high and the demand limited in view of the small Muslim community in the city.
They voiced their concerns at yesterday's monthly financial affairs panel, where officials said a law change would be sought next year to allow the issue of Islamic bonds or sukuks under the government bond programme.
"Hong Kong has the right conditions to be a centre for the US$1.3 trillion Islamic finance market. A government issue of sukuk would tell the world that Hong Kong provides the platform for overseas companies to come here and issue Islamic bonds," said Jackie Liu, a principal assistant secretary for financial services and the treasury.
Legislator Sin Chung-kai, however, questioned the rationale of such a bond.
"The government has no need to raise funds," Sin said. "The whole purpose of the sukuk bond is to promote Islamic finance, but it would involve a lot of expenses. It might not be that successful either.
"We have to ask if it makes sense to use taxpayers' money to promote such products."