IslamicFinance.de

Hong Kong's government has proposed a new law allowing it to issue Islamic sovereign bonds. This is a grand plan but maybe a little too ambitious. This is not the first time the government has promoted Islamic finance but not much has been achieved. The Hong Kong government now plans to issue sukuk. But whether a government issue will encourage other companies to follow with their own offerings remains a big question mark. The government has already launched the government bond and ibond programme but the local debt market is still not very active. Brokers speculate the Hong Kong government wants to promote Islamic bonds because Beijing wants to have a good relationship with Middle Eastern countries. If that is true, it may be up to some mainland companies to issue sukuk.