IslamicFinance.de

HSBC Bank #Malaysia hopes to see a lot more Islamic financing instruments used in the development of the Southeast Asia railway network which connects China to the region. CEO Mukhtar Hussain said HSBC had a unique value proposition in this matter, being the first bank to issue sukuk in Malaysia. The railway network involves building more than 3,000 km of rail lines from China’s Yunnan province through Laos, Cambodia, Thailand, Malaysia, Singapore and Indonesia. It is one of China’s seven main transport routes under the Belt and Road Initiative (BRI). The project adopts a public-private partnership financing approach, one that puts the financing requirements efficiently to the private sector and therefore can relieve the pressure from the nations’ budget.

The rise of sukuk, driven by the growing influence of investors who want syariah-compliant investment and savings products, opens new opportunities in Islamic economies, says HSBC Bank Malaysia Bhd. In a statement, it said interest was strong in Gulf Cooperation Council member states as well as in growing economies such as Malaysia and Turkey. For those seeking finance, syariah-compliant debt offers access to the large pool of capital in oil-rich countries in the Middle East and South-East Asia. The bank said sukuk also had broad appeal, particularly in the Muslim world, where borrowers were attracted by the prospects of cross-border flows from the Gulf countries.