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Friday, 6 December 2013

Hong Kong, Malaysia eye closer Islamic finance ties

Bankers in Hong Kong and Malaysia are strengthening ties to boost Islamic business by focusing on the issuance of Islamic bonds and mutual funds to target investors in both markets.

A private-sector forum hosted by regulators this week is part of growing efforts to boost cross-border business between the two Asian financial centres, as competition heats up for a slice of Islamic finance business.

Identifying potential sukuk issuers which can benefit from broadening their funding sources is one area of focus, said a joint statement from Malaysia's central bank and Hong Kong's Monetary Authority.

Those plans are being spurred by Hong Kong enacting a tax bill in July to facilitate sukuk issuance, while regulators aim to present a bill in the first quarter of next year to allow the government to issue sukuk of its own.

Islamic finance, centred in southeast Asia and the Middle East, follows religious guidelines such as a ban on interest and monetary speculation. Such transactions often need clarification on their tax status as they can face heavy taxation because they involve multiple transfers of the assets backing them.

Getting traction on Islamic funds is another priority, capitalizing on a mutual recognition agreement signed in 2009 between both regulators.

Malaysia is already encouraging funds to be marketed to the Gulf region through a similar agreement with the Dubai Financial Services Authority.

Malaysia has the largest base of Islamic mutual funds in the world, with 210 retail and wholesale funds that had 79.6 billion ringgit ($24.6 billion) in assets under management as of December 2012.

The forum was attended by eight commercial banks and three fund management companies, with a conference in Hong Kong now planned for the first half of next year to raise awareness of Islamic finance.

(Trade Arabia / 06 Dec 2013)
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Islamic Finance Market Hits $1.7 Trilion – Central Bank of Kuwait Governor

‘Number Of Islamic Institutions Exceed 600’
KUWAIT CITY, Dec 4, (KUNA): Volume of the global Islamic financial market has reached $1.7 trillion, revealed the Central Bank of Kuwait Governor, hoping the Shariaa-abiding services will grow further and turn much more competitive worldwide. Volume of the financial Islamic services market, measured by assets’ volume, has exceeded $1.7 trillion, making a record jump from only $150 billion in middle of the 90s, said Dr Mohammad Al-Hashel, in a statement he addressed to the opening session of the World Islamic Banking Conference (WIBC 2013) that opened in Manama, Bahrain, on Tuesday. Number of financial institutions has exceeded 600, operating in 75 states, said the CBK governor in his statement at the Manama-hosted conference, excerpts of which were released in a statement, issued by the CBK in Kuwait on Wednesday.

“Although such developments are encouraging, they remain short of what we aspire to with regard of the ambition to make more progress and growth in the Islamic financing industry and bolster this sector competitive status at the international level,” Dr Al-Hashel said. Dr Al-Hashel was a keynote speaker at the convention, themed “transformations to boost international Islamic financing competitiveness.” He was invited to the conference by his Bahraini counterpart, Rasheed Mohammed Al-Maraj, considering Kuwait as a pioneer in Islamic finance services.

In contrast to the positive figures reflecting growth of the Islamic financial markets, Dr Al-Hashel noted that Islamic funding has remained at the ebb, estimated at only one percent of the global financing. The number-one Kuwaiti banker presented several ideas to tackle the Islamic funding weakness, proposing special laws aimed at encouraging such services, boosting supervisory and regulatory systems, giving a role for academic and research institutions. Underlining pivotal role of the Shariaa supervisory authorities, Dr Al-Hashel called on the financial institutions to innovate and develop new services. Funding should be available to all consumers, regardless of religious beliefs, and such an approach would make the Islamic financing services competitive vis a vis the classic financing systems.

(Arab Times / 06 Dec 2013)
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