First HK sukuk listed in Dubai

Dubai saw on Thursday the listing of the very first Islamic bond or sukuk in its stock market by China's Hong Kong Special administrative region.

Hong Kong's financial secretary John Tsang Chun-wah rang the bell to celebrate listing of the one-billion U.S. dollar sukuk.

The listing marks Dubai as one of the top three listing venues in the world for sukuk, with a currently listed nominal value of 24.05 billion dollars. The Nasdaq Dubai competes with the sukuk hubs in Kuala Lumpur and in London.

Mohammed Abdullah Al Gergawi, chairman of the board of the Dubai Islamic Economy Development Center, said "our expanding links with Hong Kong underline Dubai's role as a dynamic international financial center that attracts active participation from around the world."

John Tsang Chun-wah said "Hong Kong looks forward to expanding its capital markets connections with the UAE and other middle east and north africa countries, as part of a growing trend of international cooperation and collaboration."

Essa Kazim, secretary general of Dubai Islamic Economy Development Center, said "Hong Kong's sukuk has added new impetus to the growth of Islamic finance around the world, as Sharia's compliant solutions prove increasingly attractive to an expanding range of market participants."

Dr. Nasser Saidi, a leading Dubai economist and former minister of economy in Lebanon said Asian economies can attract foreign investments from the Gulf Arab countries more easily through sukuk as Arab investors regard them as financing vehicle with lower risks and in line with their strategy to expand the Islamic finance industry.

A total of 14.15 billion dollars of sukuks have been listed on Dubai's exchanges so far in 2014, up 107 percent from 6.85 billion dollars in 2013.

Sukuks do not pay interest but they periodically distribute profit shares of excess returns.

Dubai aims to become the capital of the global Islamic economy, which according to the Dubai Islamic economy development center is going to rise from two trillion dollars last year to 3.7 trillion by 2019 as more non-Muslim countries jump on the bandwagon.