PM: ‘Islamic investments can blossom in UK’

Welcoming world leaders from Muslim countries to London for the World Islamic Economic Forum, the prime minister said it was important for London to promote and boost Islamic finance.

He said: “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 and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world.

“Investing in London is good for you, and opening up London to your investment is good for us.”

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During his speech at the forum, which was hosted by the UK and Malaysian goverments and themed ‘Changing Worlds, New Relationships’, Mr Cameron told more than 18 global leaders and 2,700 chief executives, experts and academics that the UK is to become the first sovereign state outside the Islamic world to issue an Islamic bond.

The bond could be launched as early as 2014, Mr Cameron said, adding that the UK wanted “new investments that are right for you, new investments that are right for us, new investments that are possible because of the unique openness of the City of London”.

Also at the forum, Najib Razak, the prime minister of Malaysia and patron of the World Islamic Economic Forum Foundation, said it was important for Muslim women to become part of economic growth.

“It is time to put women at the heart of our global growth story,” he said. “All countries stand to benefit from the economic empowerment of women.”

Simon Hills, executive director of the British Bankers’ Association, called the plans to issue British Islamic Bonds a “welcome move that will increase investment opportunities in the UK from the growing Islamic finance market”.

He said: “This will offer greater choice for the Islamic banking community in the UK and will allow them to meet their regulatory liquidity requirements by investing in Sukuk-style bonds for the first time.”

Adviser View

Shabbir Razvi, principal of London-based International Finance Solutions Associates, said: “There are two perspectives here. Of course, there is some political posturing by the UK government; the whole premise behind the UK banking sector is the payment and collection of interest, and sometimes things badged as ‘Islamic’ feed into this. However, many of my clients are not comfortable with that, so if this new Islamic bond is truly Sukuk, and not just camouflaged, then it will be a good product.”