David Cameron Unveils Plans to Make London a Mecca for Middle East Wealth

THE INDEPENDENT: Prime Minister hopes London can tap into the rapidly expanding global market in Islamic investments

David Cameron has announced plans to encourage investment in the UK by Muslim countries, saying he wants to make London “one of the greatest centres for Islamic finance anywhere in the world”.

Politicians and business leaders gathered in the capital for the ninth annual World Islamic Economic Forum – the first time the major event has not been held in a Muslim country.

The Prime Minister appeared on stage alongside a number of world leaders, including King Abdullah of Jordan and the Sultan of Brunei.

Among the measures unveiled was a plan from the Treasury to issue an Islamic bond - or sukuk - worth around £200 million. It would issue fixed returns based on the profit made by a named asset, allowing for Muslims to invest without breaking Islamic laws forbidding interest-bearing bonds.

A “world first” set of indices at the London Stock Exchange to help investors identify faith-compliant firms and projects was also announced as well as a £4.5 million boost to a small business growth fund.

The global market in Islamic investments is rapidly expanding, rising by 150 per cent since 2006 and expected to be worth £1.3 trillion next year.

Mr Cameron said Britain had already taken steps to ensure Muslims were not discriminated against - such as ending “double tax” on Islamic mortgages and introducing alternative forms of student and start-up loans to comply with a ban on interest payments.

It already had more Islam-compliant banks than any other Western country and many law firms and university courses centred on the subject, he said.

But he said that his ambition was for the country to compete with finance centres such as Dubai and Kuala Lumpur - not just other non-Islamic capitals. Read on and comment » | Adam Withnall | Additional reporting by PA | Tuesday, October 28, 2013

Britain to Become First Non-Muslim Country to Launch Sharia Bond

THE DAILY TELEGRAPH: David Cameron to unveil £200m Sukuk at the World Islamic Economic Forum in London on Tuesday

Britain is set to become the first non-Muslim country to sell a bond that can be bought by Islamic investors in a bid to encourage massive new investment into the City.

David Cameron will say in a speech on Tuesday at the World Islamic Economic Forum in London that the Treasury is drawing up plans to issue a £200m Sukuk, a form of debt that complies with Islamic financial law.

The new sharia-compliant gilt will enable Britain to become the first non-Muslim country to tap the growing pool of Islamic investments that is forecast to top £1.3 trillion by next year.

The Prime Minister will say that it would be a “mistake” to miss the opportunity to encourage more Islamic investment in the UK and that the City of London should rival Dubai as a centre for sharia-compliant finance.

“When Islamic finance is growing 50pc faster than traditional banking and when global Islamic investments are set to grow to £1.3 trillion by 2014, we want to make sure a big proportion of that new investment is made here in Britain,” Mr Cameron will tell an audience of senior officials from Islamic countries.

Among those at the meeting are Sultan Hassanal Bolkiah of Brunei, King Abdullah of Jordan, Afghan president Hamid Karzai and Prince Salman bin Hamad Al Khalifa, Crown Prince of Bahrain.

The World Islamic Economic Forum has never been held before in a non-Muslim country and highlights the growing role London is playing in the Islamic finance industry. » | Harry Wilson | Tuesday, October 29, 2013

VTB Mulls Russian Debut on Sukuk Market
REUTERS: MOSCOW - Russia's second largest bank VTB (VTBR.MM) may become the country's first issuer of sukuk or Islamic bonds and is considering a deal worth several million dollars, VTB's investment banking head said on Wednesday.

Russian companies need to be more creative about raising capital as usual sources of funding have dried up in the global credit crunch and around $100 billion of foreign corporate debt payments are due this year. "We are looking at the possibility of entering this market (Islamic finance) -- both for us and for our clients," VTB Capital head Yuri Solovyov told journalists, adding that an issue from VTB could be worth several million dollars.

He declined to name which other Russian companies had expressed interest in such financing.

Globally, $14.9 billion worth of sukuk were issued last year, less than half 2007's issuance, according to Standard & Poor's.

To comply with Islam's ban on interest, sukuk are structured as profit-sharing or rental agreements, and returns are derived from underlying physical assets such as commodities or real estate. Investment, pork, alcohol, gambling and pornography is banned.

To date there have been no Russian issuers of sukuk. >>> © Thomson Reuters 2009 | Wednesday, March 18, 2009

The Dawning of a New Dark Age (Paperback & Hardback) – Free delivery >>>