| March 20
March 20 Hong Kong lawmakers support a bill that
would allow the AAA-rated government to raise around US$500
million via sukuk (Islamic bonds), a report by the territory's
Legislative Council said.
A debut sukuk from Hong Kong could be denominated in either
local or U.S. dollars, helping to boost Hong Kong as a financial
centre and position itself as a gateway between mainland China
and Islamic investors.
The plan comes at a time of increasing competition among
financial centres for a slice of Islamic finance business, which
is centred in southeast Asia and the Middle East.
A $500 million sukuk issue would be larger than debut
sovereign issues planned by Luxembourg and Britain.
The Hong Kong report described its planned issuance as
"inaugural", suggesting it would not be a one-off like Britain's
plan for a 200 million pound ($333 million) sukuk issue.
"The Bills Committee supports the bill in principle. The
preliminary thinking for the inaugural sukuk issuance under GBP
(Government Bond Programme) might be in the size equivalent to
around $500 million or more," the report said.
Other details of the issue have yet to be decided, such as
whether it could be offered through arranging banks or by way of
tender, similar to Hong Kong's conventional bond programme.
Sukuk proceeds would be placed with the territory's Exchange
Fund, which is managed by the Hong Kong Monetary Authority.
The report noted that the government had been encouraging
companies to issue sukuk in Hong Kong. The idea of Hong Kong
sukuk was raised as far back as 2008, when the territory's
airport authority considered selling sukuk worth up to $1
billion, but no sale has taken place so far.
The committee has posted a notice inviting written views
from the public on the sukuk bill, although it said no
submissions had been received yet. The comittee will resume
discussion of the bill on March 26.
($1 = 0.6014 British pounds)
(Editing by Andrew Torchia)