[LONDON] The UK will launch the first Syariah-compliant sovereign bond issued by a non-Islamic country, British Prime Minister David Cameron said at the opening of the ninth World Islamic Economic Forum (WIEF) in London yesterday.
The £200 million (S$400 million) issue will be launched next year by the UK Treasury, Mr Cameron said, adding that the London Stock Exchange will also launch new Islamic market indices to enable investors to screen Syariah-compliant investment opportunities.
Welcoming delegates to the first-ever WIEF forum to be held in a non-Islamic country, the British Prime Minister made clear that his government will spare no effort to make London a major global hub for Islamic finance.
"London is already the biggest centre for Islamic finance outside the Islamic world," he pointed out. "But our ambition is to go further still. I want London to stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world."
He said the City of London - the square mile where its financial services industry is concentrated - already has more banks compliant with Syariah finance than anywhere else in the non-Islamic world as well as more than 25 law firms that offer Islamic finance-related services.
Sixteen British universities or business schools offer MBAs or other similar qualifications in Islamic finance.
Some British financial institutions also offer tax relief on Islamic mortgages as well as Syariah-compliant student loans and start-up loans for entrepreneurs. A key feature of Islamic finance is that it involves no separate interest charges.
Though they comprise less than one per cent of global financial assets, Syariah-compliant assets have been growing. Since 2008, they have increased in value by 19.5 per cent per year to US$1.6 trillion in 2012, according to a study by PricewaterhouseCoopers. They are expected to reach US$6.5 trillion by 2020.
Such assets comprise banking assets - the biggest component; sukuks (Islamic bonds), which entitle the holder to receive a share of revenue from the underlying assets, without interest); Islamic funds, and takaful assets (Syariah-compliant insurance assets).
The ninth WIEF, which is being jointly hosted by the UK and Malaysia, had a record turnout this year, with 128 countries represented, some 2,700 participants and an impressive lineup of heads of government and heads of state.
These include Prime Minister Najib Razak of Malaysia (who is also the patron of the WIEF)), Sultan Hassanal Bolkiah of Brunei, Prime Minister Nawaz Sharif of Pakistan, President Abdul Hamid of Bangladesh, President Hamid Karzai of Afghanistan, Vice-President Boediono of Indonesia and leaders from Bahrain, Bosnia, Iraq, Jordan, Kazakhstan, Kosovo, Morocco and Turkey.