The objective in developing an Islamic bond market in Hong Kong is a long-term Government policy goal which will not be affected by individual credit events, Secretary for Financial Services & the Treasury Professor KC Chan says.

He told the Legislative Council today the financial difficulty facing investment company Dubai World is a credit event of an individual debt issuer.

"According to the assessment made by the administration and the regulators, the event will not cause any systemic implications on the financial system and market of Hong Kong," he said.

He said while the event has some impact on both the Islamic bond and conventional bond markets, the cause of the event has nothing to do with the trading structure and mode of operation of the Islamic bond market.

"The objective in developing an Islamic bond market in Hong Kong is to increase the breadth and depth of the local bond market, diversifying Hong Kong's financial market and consolidating Hong Kong's status as an international financial centre," he said.

"This is a long-term policy goal, which will not and should not be affected by individual credit event."

He said the administration and regulators will closely monitor the event's developments and market conditions, and advised investors should make investment arrangements according to their own investment needs and risk appetite.