Islamic bonds, called Sukuk, are currently one of the hottest topics in the financial world, thanks in part to the receding US economy making oil-rich nations an attractive and lucrative market to tap into.

But entry into the market is not without its challenges.

Since the Islamic faith prohibits the taking of interest, Sharia-compliant investment products operate under a completely different framework and require a distinct infrastructure.

To capture the growing interest in Islamic financing, the Hong Kong Securities Institute (HKSI), which provides licensing exams and training for professionals, said an Islamic finance training course will be launched this year.

"There is a need to train people, round out the skills that they don't have and get a group of talent that is knowledgeable in this," said Angelina Kwan, director of the HKSI. She said Hong Kong needs to get the talent pool ready within two years in order to stay competitive.

In response to the Hong Kong government's initiative to tap into the Islamic bond market - announced in the policy speech last year - HKSI embarked on a mission to Kuala Lumpur in April in hopes of learning the trade of Islamic financing.

"With 70 percent of Malaysia's population being Muslims, its Islamic financial system is highly successful and well-developed," HKSI Chairman Au King-lun said, "There is certainly a lot to learn from them."

Au said the lack of talent is one of the major challenges Hong Kong faces in developing a world-class Islamic financial system. Also, with a relatively low Muslim population, Au said Islamic financial products in the future will likely be distributed overseas.

"Hong Kong can serve the important role as middleman between oil-rich money and the mainland," he added.

HKSI Chief Executive of Hong Kong Securities Institute Gary Cheung said the institute will kick-off a structured Islamic finance course in the third quarter, and the company will source qualified professionals overseas to provide instructions.

"The training will cover aspects in legal, accounting and product development in Islamic financing," Cheung said.

(HK Edition 05/19/2008 page1)