New horizons - IFN

New horizons The market was rife with excitement this week when the Hong Kong government announced its amendments to its Alternative Bonds Scheme allowing for the incorporation of a level playing tax field for Sukuk. The move is expected to serve the republic well in attracting investors from the rest of Asia and the Middle East, as well as mobilizing the issuance of domestic Sukuk through the utilization of Hong Kong-based assets. The initiative, which is considered to be somewhat of a breakthrough, was followed by similar announcements by the state government of Osun in Nigeria which is awaiting approval from the country’s Securities and Exchange Commission for the issuance of a US$61.3 million Sukuk, and an application by Bank Asya to the Turkish Capital Markets Board for the launch of a US$521.93 million, or TRY1 billion Islamic bond issuance. In tandem with this week’s issue, Islamic Finance news has launched a new online service to our clients and esteemed readers, dubbed the Shariah Scholars Survey, in order to gain feedback from the market on their opinion of the Shariah scholar industry. Over the years, it has become apparent to us at Islamic Finance news, through numerous interviews and conversations with industry players, that there are several issues that need to be addressed within the Shariah scholar service industry — which also serves as the backbone of the entire Islamic banking and finance system — including the creation of a universal board governing the approvals and qualifications of scholars and a streamlining in fee structure; among others. It is hoped that the launch of this survey will bring about constructive and healthy debate with an eye on creating a streamlined and efficient service for the benefit of all stakeholders. Our newsletter this week covers in depth the recent developments in Hong Kong; the challenges faced in the creation of an Islamic banking and finance industry in one of the world’s most populous nations, India; and Bank Negara Malaysia and the Securities Commission of Malaysia’s update on its joint information note on local and foreign currency issuances in Malaysia. We also feature write-ups from Thailand and Europe, as well as a case study on the MCIS Zurich Shariah compliant investment-linked fund. As always dear readers, we hope you find this week’s issue of IFN a productive and insightful read.

Cover Story

Hong Kong: Too little, too late?

Hong Kong’s new Sukuk law has taken an unprecedented length of time to come to market and while most players are cautiously pleased with its final arrival, the general consensus appears to be that it could be too little, too late. Despite its status as an accepted international financial center, Hong Kong has limited potential for Islamic finance except as a conduit to the more attractive pastures of Mainland China. (Click to read full report)