Cameron to announce Islamic index
Plans for a ground-breaking new Islamic index on the London Stock Exchange are being announced by David Cameron in a drive to establish the City as one of the world's leading centres of Islamic finance.
Addressing the World Islamic Economic Forum (WIEF) meeting in London, the Prime Minister will say that the UK also intends to become the first country outside the Islamic world to issue its own Islamic bonds, known as sukuk.
The announcements reflect the Government's determination to tap into the fast-growing global market in Islamic investments, which have risen by 150% since 2006 and are expected to be worth £1.3 trillion next year.
"Already London is the biggest centre for Islamic finance outside the Islamic world. And today our ambition is to go further still," Mr Cameron is expected to say.
"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."
The creation of a new stock exchange index listing Islamic compliant companies is intended to attract more Islamic investors to London by making it easier for them to identify suitable investment opportunities.
At the same time the Treasury is working on the issue of a bond-like sukuk, worth around £200 million, which could be launched as early as next year.
It will be structured so that investors are paid a fixed return based on the profit generated by an underlying asset, in line with Islamic principles which forbid interest-bearing bonds.
The WIEF, which is being held for the first time in a non-Islamic country, is expected to bring 15 world leaders to London with more than 1,800 delegates from 115 countries - many of them from the Government's priority high-growth markets.
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