October 28, 2013
David Cameron will 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. The prime minister will also unveil plans by the London Stock Exchange to launch the first Islamic Market Index.
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 as 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.
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.