Islamic finance is an important new area of interest to banks and financial services. Not only that, they also present an opportunity for new products and services, but there is also fund one of the most dynamic. Despite the global economic slowdown, analysts believe the Islamic asset market to grow by 10-15 percent in 2009. If this is seen not as fast as the growth of 20-30 percent in 2008, it is nevertheless an important opportunity for the banks, especially in Hong Kong. Hong Kong has made a point of being an attractive destination for investors and participants in marketing Islamic finance.
With a worldwide market volume of 400 billion U.S. dollars, and without clear leadership in the Islamic financial market Hong Kong has much to gain from the strengthening of market presence, infrastructure and capacity in this area. Although Dubai, Kuala Lumpur and London have all the major markets for the products of the Sharia, no one can claim global leadership in Islamic finance. And the world with over 1.6 billion Muslims, is a large market and growing financial center can not afford to ignore. Islamic law (Sharia) prohibits the taking or giving interest (Riba), the essential element of Islamic banking. For this reason, other approaches such as incentives and financing unit prices developed to comply with Shari'ah.
These special forms of financing are in retail, commercial and private bank debt and capital result, insurance companies, asset management, structured finance, project finance, derivatives and other areas. advantage of this opportunity, it is important that market participants in Hong Kong are well trained and well versed in the intricacies of Islamic finance.
Total Sharia forbids investment is for sale or payment of interest (Riba), speculative transactions or money (Masir) something to the uncertain conditions of the contract or you do not (Gharar) and investment in enterprises, the non-Islamic behavior (such as companies that deal with alcohol, drugs, gambling, weapons, etc.). Financial services companies need to enter the market for Islamic finance to ensure that their staff trained on the basics:
• Bai al INAH sale and repurchase
• Ad-Bai Dayn - the sale of debt
• Ijarah - Leasing
• Istisna - swap with delivery delay
• Mudarabah - profit sharing
• Musharaka - Equity
• murabaha cost - plus
• Sukuk - Sharia bonds correspond
• Takaful - Islamic insurance
• Jualah - service charges
• kafala - Warranty
• Qard - Loans
• Wakala - Agency
In addition to national development companies can be viewed Hong Kong as the gateway to China for Islamic finance. With the large number of petrodollars, is looking for the Chinese state investment fund that creates a unique opportunity for Hong Kong (which is the platform for raising funds for Chinese companies outside China).
Hong Kong has already developed financial products that comply with Sharia and has several Sukuk Index fund and trade on the markets. While the structures continue to be tested thrive in a market of Islamic finance, there are signs that some of the authors and sophisticated investors who are looking for structures with higher value added and innovative. As a center of innovation in financial markets in Asia, Hong Kong is well positioned to seize this opportunity.
However, my analysis shows that the banks do not have in Hong Kong and financial services company's human capital, skills or knowledge to be genuinely in the market for Islamic finance. Banks should therefore invest in broad-based training initiatives for employees so that their staff understand the market opportunities and potential approaches to Islamic finance. This can happen if the executives really believe the opportunity for Sharia-compliant products and to embrace an effective training as a means to bring change.
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Hong Kong government faces in trying to implement the changes necessary to create a level playing field between traditional financial products and alternatives presented by the Islamic Finance.The focus is to identify market barriers and existing legislation to ensure that products are Shariah-compliant can offer, and can even compete with traditional forms of financing.
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