HSBC Amanah to add wealth, insurance products
* Eyes further Islamic real estate funds
* Redesigned sukuk fund on cards for next year
* To boost wealth management, insurance offerings
LONDON, Nov 5 (Reuters) - The Islamic unit of HSBC (HSBA.L), HSBC Amanah, will broaden its range of Islamic wealth management and insurance products and try to tap demand for products offering capital protection, its deputy CEO said on Thursday.
The firm is also likely to revisit its aborted sukuk fund in the new year after a redesign to reflect the client feedback which scuppered the first attempt.
"We need a more comprehensive range of Islamic wealth management products; a more sophisticated, comprehensive range. At the moment there is a great demand for capital guaranteed or capital secured products," David Dew told Reuters.
Islamic finance faces difficulties accommodating the growing sophistication of investors within a narrower range of parameters and restrictions than mainstream providers. Products must also be endorsed by scholars, who follow different schools of thought, and have created fragmentation in the market.
"It is a challenge; there are structures available that can do this (capital guarantee) but the industry needs to evolve and perfect these structures," said Dew.
"We see similar needs for takaful (Islamic insurance), both retail and corporate. There is a basic range in place but I think the range can be expanded on the corporate and retail side and in more markets," he added.
SUKUK
Earlier this year HSBC Amanah designed a sukuk or Islamic bond fund but told Reuters in September it had postponed the launch after investors were put off by the lock up period. [ID:nL9712502].
"There is demand for sukuk investments, the challenge is finding the necessary suitable investments -- liquidity in Islamic finance is sometimes a challenge; the markets are not as deep, as broad as the conventional markets," he said.
"Most clients preferred an open-ended fund, with the ability to redeem -- that remains a challenge. We are working on it. I hope we will return to the market with a new sukuk fund, I suspect it will be more likely next year," he said.
Dew sees fresh opportunities for real estate funds, both commercial and residential. "There are plenty of investors interested in investing globally to diversify," he said.
"We are certainly interested in looking at additional real estate funds... they are more likely to be closed-ended funds."
HSBC Amanah already runs an open-ended commercial real estate, GPIF, which suspended redemptions last year in the wake of the credit crunch. HSBC Amanah has not yet decided when to allow investors to withdraw funds, Dew said.
HSBC Amanah managed $16.5 billion in Sharia-compliant assets as of end-June this year. (Reporting by Cecilia Valente; Editing by Jon Loades-Carter)
