167
Chart 4.54: Factors Influencing the Development of Hong Kong’s Sukuk Market
Sources: RAM, ISRA
While Hong Kong’s sovereign issuances have been highly successful, underlining investors’
confidence in its credentials, there are a number of challenges that it still faces in further
developing its sukuk market. Based on these challenges, the policy recommendations from the
supply and demand sides are briefly outlined in Tables 4.31 and 4.32.
Table 4.31: Recommendations to Improve Demand (Buy Side) – Medium-Term Solutions
Issues and challenges Demand (buy side) opportunities
Market awareness More promotional activities on Islamic finance and
sukuk among stakeholders.
Establish collaborative platforms between the
regulators and industry players, to settle arising issues
and increase awareness on sukuk.
Limited domestic Muslim population Incentives provided through tax rebates for individuals
to invest in retail sukuk.
Investor base As a leading global offshore RMB business hub, Hong
Kong has the advantage in developing RMB-
denominated sukuk products. Previous RMB-
denominated sukuk issued in Malaysia had attracted a
diverse group of investors, reflecting the strong
demand for RMB-denominated sukuk. Hong Kong could
take similar initiatives.
Sources: RAM, ISRA