G_d save the Queen.
(Hat Tip: Poppy from Scotland)
The story comes from The Telegraph.
Britain to become first non-Muslim country to launch sharia bond
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.
The London Stock Exchange is preparing to launch an Islamic Market Index to help the managers of sharia-compliant funds identify new investment opportunities.
The UK’s plans to issue its own Sukuk could lead to billions of pounds of British gilts being sold to Islamic investors, enabling the Treasury to diversify away from its traditional sources of funding.
“For years people have been talking about creating an Islamic bond – or Sukuk – outside the Islamic world, but it’s just never quite happened,” Mr Cameron will say. “Changing that is a question of pragmatism and political will. And here in Britain we’ve got both.
To comply with sharia law, Islamic investors are forbidden to receive interest. Sukuks avoid this problem by ensuring the fixed return investors receive on the debt is linked to the profit generated by an underlying asset.
The value of Sukuks already listed on the London market has reached $34bn (£21bn) over the past five years with nearly 50 bonds quoted by the London Stock Exchange.
Sharia-compliant funds have already been used to fund some of the capital’s largest developments, including the Shard and the Olympic Village.
More than 20 banks currently offer Islamic financial products and services in the UK, more than any other Western country, with the number expected to grow further.
The Government has put securing links with growing financial centres in Islamic countries and fast-growing Asian markets at the heart of its plans for the City.
Earlier this month the Chancellor, George Osborne, announced a deal with China to make London a leading centre for the growing trade in renminbi-denominated assets and to make it easier for Chinese banks to set up investment banking operations.