By Shadi Bushra
LONDON (Reuters) – The London Stock Exchange will launch an index to identify investment opportunities compliant with Islamic principles, aiming to capitalise on strong growth in the sector, Prime Minister David Cameron will tell a conference.
The planned Islamic Market Index will identify companies that meet traditional Islamic investment principles and help London cement its position as the biggest centre for Islamic finance outside the Islamic world, Cameron will tell the World Islamic Economic Forum in London on Tuesday.
Cameron will also reiterate Britain’s intention of launching its own Islamic bond worth around 200 million pounds as early as next year, making it the first Western country to do so, according to the text of his speech distributed by his office.
Britain’s push to maintain its edge as the leading Islamic finance hub outside the Muslim world comes as growth in the global market for Islamic-compliant instruments outstrips its conventional counterparts.
“When Islamic finance is growing 50 per cent 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,” Cameron will tell the forum.
Islamic finance is based on the concept that money has no intrinsic value and should only be used as a measure of worth, precluding involvement in speculative investments or the taking and receiving of interest. Islamic-compliant investments are instead structured on the exchange of ownership of tangible assets or services.
The initiative to launch a sovereign British sukuk, or Islamic bond, began more than five years ago but was scrapped in 2011 before the British Treasury revived the idea this March.
The London Stock Exchange has hosted listings of sukuk valued at more than $34 billion (21 billion pounds) over the last five years, according to a statement from the prime minister’s office.
Islamic investments have also helped finance London landmarks such as the Shard skyscraper and the Olympic Village.
The World Islamic Economic Forum is hosting its ninth annual conference in London from Tuesday through Thursday, the first time it has been held in a non-Muslim country.
(Editing by David Holmes)
- Religion & Beliefs
- David Cameron
- London Stock Exchange
- World Islamic Economic Forum