The Monetary Authority’s deputy chief executive, Darryl Chan, says the Middle East is interested in expanding into the Hong Kong market, as the region looks to increase its investment in the region.

Chan was part of the SAR's official delegation to Saudi Arabia and the United Arab Emirates last week, aimed at finding new business opportunities for Hong Kong.

He told reporters after meeting representatives of various financial organisations that the SAR stands to gain as the Middle East shifts some of its investments away from the European and American markets to mitigate risks.

"They feel increasingly that Asia will be a rather important market in future, be it the source of financing or for investment purposes," he said. "So I think it's a good opportunity."

He said business leaders in the Middle East were "quite interested" to know how Hong Kong can provide funds for their firms or help them with their investment strategies.

Chan said he'd advised them to consider issuing bonds in the SAR, adding that the city is the prime location for them to target investors from mainland China and the rest of Asia.

The official noted that Hong Kong has already established a framework for Islamic bonds after issuing three rounds of the products.

"By issuing Islamic bonds ourselves, we'd know if certain regulatory, legal or tax requirements in Hong Kong are not compatible with Islamic finance. So in order to develop Islamic finance, we needed to amend some tax laws in Hong Kong," he explained.

Chan said the Monetary Authority is planning another visit to the Middle East in the coming months to hold further talks with central banks in the region.