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UK PM to unveil plans to launch Islamic bond

Britain is set to become the first non-Muslim country to sell an Islamic bond.

Source : Presstv / 29 Oct 2013

British Prime Minister David Cameron is to unveil a new Islamic index on the London Stock Exchange (LSE) in order to attract more Islamic investments.

Cameron will tell the World Islamic Economic Forum (WIFE) in London that the Treasury plans to issue a £200 million Islamic bond, known as Sukuk, as early as next year.

"There are some countries which naturally look inwards, pull up the drawbridge and refuse to recognize that the way the world is changing affects their future success. But Britain will not make that mistake," Cameron is expected to say.

The introduction of the new bond, which can be bought by Islamic investors, will make Britain the first non-Muslim country to sell an Islamic bond. It will also enable the Treasury to diversify away from its traditional sources of funding.

“When Islamic finance is growing 50pc 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,” the British premier will say.

According to Islamic principles, interest-bearing bonds are forbidden. The new bonds, therefore will be structured so that investors are paid a fixed return from a tangible asset or service.

Fifteen world leaders with more than 1,800 delegates from 115 countries will attend the London WIFE forum, which is due to be held later on Tuesday.

 

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