Dagong Global Credit Rating, the largest Chinese-owned credit rating agency, has obtained the license to operate in Hong Kong - making it a new force joining the push for the development of dim sum bonds in the city. "We have also talked with the Hong Kong government to promote the sukuk market," says Guan Jianzhong (关建中), company chairman.

Backed with rating about one third of China's total onshore renminbi issuances, Dagong positions itself an important player that addresses investors' concerns on debtors' credit risks in the offshore renminbi market.

"A couple of years ago, the Asian bond market growth was really US dollar-denominated. But during the last few years, what we've seen is the dim sum market development, which made HK$500 billion this year," notes Brian F. McCullough, chief executive officer of Dagong Global Credit Rating (Hong Kong). "So from a trendy perspective, it's a very good time [for Dagong to launch its Hong Kong branch]," he adds.

Founded in 1994, Dagong challenges the Western rating standard which is largely based on default rates. Instead, it established its own philosophy of a rating that weighs on the debtors' "wealth creation capability", "sources of repayment" and "debt repayment capability", according to Guan.

"We have quite a lot of big foreign clients and we encourage them to issue dim sum bonds in Hong Kong," he shares.

As for sukuk, Guan believes the demand is much larger than what the market can now provide, and this will prompt the need for Hong Kong to develop the Islamic finance market. "After all, Malaysia cannot satisfy all the demand," he adds.