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#1 [Permalink] Posted on 29th October 2013 09:34

David Cameron to unveil plans for �200m Islamic bond

World Islamic Economic Forum will hear prime minister outlining plans for Sukuk bond compliant with Islamic law

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David Cameron will on Tuesday pledge to make London one of the world's "great capitals of Islamic finance" when he unveils Treasury plans to create a �200m Islamic bond by early next year.

In a speech to the first meeting of the World Islamic Economic Forum to be held outside a Muslim country, the prime minister will also unveil plans by the London Stock Exchange to launch the first Islamic Market Index.

Cameron will tell more than 1,800 political and business leaders, who have travelled to London for the ninth meeting of the forum, that Britain aims to secure a slice of global Islamic investments, due to reach �1.3tn by next year. Britain hopes that the index will help identify Islamic finance opportunities.

The government moved on Monday night to offer assurances that the Islamic bond, or Sukuk, and the Islamic index would not encourage investments that discriminate against Israel. Boris Johnson was forced to order Transport for London to rewrite the contract for the Emirates Thames cable car in the summer amid fears that Israeli companies could have been blocked from involvement in the project. The United Arab Emirates does not recognise the state of Israel.

A government spokesman said: "The government's decision to issue a Sukuk compliant bond is about making sure Britain is open for business - we will not open one door at the expense of another. While the Treasury is still working on the practicalities, we can confirm that the government would never exclude a supplier on nationality grounds."

The Sukuk bond will comply with Islamic law and investment principles that prohibit lenders from charging interest.

The prime minister will say that London is already the biggest centre for Islamic finance outside the Islamic world. But he will also say: "Today our ambition is to go further still. Because I don't just want London to be a great capital of Islamic finance in the western world; I want London to stand alongside Dubai as one of the great capitals of Islamic finance anywhere in the world. There are some countries which naturally look inwards, pull up the drawbridge and refuse to recognise that the way the world is changing affects their future success. But Britain will not make that mistake."

Cameron will say that his government aims to become the first outside the Muslim world to issue an Islamic bond next year. He will say: "For years people have been talking about creating an Islamic bond outside the Islamic world. But it's just never quite happened. Changing that is a question of pragmatism and political will. And here in Britain we've got both.

"This government wants Britain to become the first western sovereign to issue an Islamic bond. So the Treasury is working on the practicalities of issuing a bond-like Sukuk worth around �200m, and we very much welcome the involvement of industry in developing this initiative which we hope to launch as early as next year."

On the Islamic index he will say: "The growth of Islamic finance means that there is an increasing demand for new ways of identifying Islamic compliant business activities. Again the City of London is leading the way - this time not just in Europe, but right across the world.

"Today the London Stock Exchange is announcing the creation of new indices. These not only identify companies that meet traditional Islamic investment principles but also use the most advanced techniques on the planet to screen financial ratios and enable investors to identify opportunities with lower volatility. In plain language, this means the creation of a new way of identifying Islamic finance opportunities - a world-leading Islamic Market Index."

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#2 [Permalink] Posted on 29th October 2013 09:49

Not sure how it will work or if it will actually go through but a clever move nonetheless.

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#3 [Permalink] Posted on 29th October 2013 09:50

Bit of a confusing article....him stating that London is already the biggest centre for Islamic finance outside the Islamic world, is completely incorrect....and a bit of an airy fairy statement.

Being obviously sceptical of politicians motives, which are normally for personal gain or benefit of ones own cause...I would really love to know the truth behind this formation of Islamic bond, and how and why it's come about.

I know a few years ago Mufti Taqi uthmani saheb attended the house of commons to discuss Islamic finances.... I'm sure he was invited with an objective and agenda in mind. It was a first invite of it's kind in the commons. Lets see where this will head....very interesting indeed.

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#4 [Permalink] Posted on 29th October 2013 09:53

Article around the world are being published on the fact that had the world adopted Islamic financial laws, the world economy would not be in such a terrible state.

Also, there could be a political agenda behind it. The Muslim population is high in the UK. That's a lot of votes!

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#5 [Permalink] Posted on 29th October 2013 10:01

A mate just told me that their....

Talking about in on the radio - LBC 97.3

The podcast should be available later if anyone is interested in listening to it.

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#6 [Permalink] Posted on 29th October 2013 10:14

Yes this has always been said about interest free loans etc, but the western governments have always laughed it off as some non profit making charity scheme...maybe the penny has just dropped...or there is a bigger profit margin agenda in place.

They believe interest is the sole component that keeps the economy running, by involving one interest free component in the chain it will effect other parts of financing, this may lead to a requirement in a complete haul in the system, which is virtually an impossibility if they want to keep the interest system running as it is. This is something that they would already are aware of so I'm not sure what the real incentive is....not until contractual agreements are published it's difficult to know with hindsight.

Governments don't do anything for the goodness of the people, there is always always an element of personal gain.

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#7 [Permalink] Posted on 29th October 2013 10:24

There is an ahadith which says to the nearest meaning that it looks like it is increasing but in reality it only decreases and this is very true about Riba/interest

Most Islamic finance models of today are defunct, even though the ulema have put some effort into this and wrote extensively, some have even attained masters in it. But their is no real Islamic finance today in my opinion, they claim to be Islamic, nothing Islamic about them other then the name 'Islamic'.

Penny might have dropped as their capitalist system is a flop, however I think they just want the investments from the Middle East that's all, I don't think they'll be changing their system their too deep into it and sadly many of our brothers and sisters have been caught in the system too, it's very hard today to avoid interest, may Allah protect us and give us barakah in our rizk.

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#8 [Permalink] Posted on 29th October 2013 10:42

abu mohammed wrote:

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Investment into British Economy backed by real (tangible) Assets, its obvious what the Agenda is for a cash strapped nation.

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#9 [Permalink] Posted on 29th October 2013 18:04

How inventive! By making sure that London is seen as a real centre for Islamic finance they aim to broaden the investor base that invests via London.

These are interesting financial instruments, basically a classic case
of rule interpretation. In addition there are paid experts who declare
that the bonds comply with Islamic law.

PAID EXPERTS!!

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