November 3, 2013 :
London recently hosted the 9th World Islamic Economic Forum at Excel Center, where UK revealed its plans to become the first country outside the Muslim world to sell Shariah-compliant Islamic bonds (sukuk) as early as 2014. Sukuk would be valued at about 200 million pounds ($320 million). In addition, the London Stock Exchange will be creating an Islamic Market Index.
Approximately 40 percent of the world’s 25 fastest growing markets are within Muslim-majority countries. About 60 percent of the world’s sukuk is issued from Malaysia. Outside the Islamic world, London is ranked as the number one centre for Islamic finance- it is the European base for several Middle East banks and a major centre for Middle East investors.
Britain first announced plans for a sovereign sukuk 5 years ago, but that issue never materialised as the country’s Debt Management Office decided the structure was too expensive and would not going to be value for money. However, several projects in the UK in the recent years such as Thames Water, Barclays, Sainsburys, Harrods and the Olympic Village had significant contributions by Islamic financiers. The government established an Islamic financial task force in March 2013 to review subjects ranging from banking regulation to standards for Islamic finance education. Britain also has more banks compliant with the principles of Islamic finance than any other Western country. Britain has taken steps to support new businesses to grow across the Islamic world such as the formation of government partnership with the Shell Foundation to create a new 4.5 million pounds grant to boost the work of the Nomou initiative, a growth fund that provides skills and finance to small businesses across the Middle East and the Gulf.
Through sukuk issuances, UK might come at par with Dubai and Kuala Lumpur in Islamic finance.
Reported by: Shambo Dey