UK Prime Minister David Cameron is to launch a new Islamic Index on the London Stock Exchange (LSE) as a part of move to identify investment opportunities compliant with Islamic principles and to capitalise on strong growth in the sector.
Additionally, Cameron will also launch a Shariah-compliant bond known as sukuk, which is expected to be valued at about £200 million (US$320 million) sometime next year.
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Cameron at the World Islamic Economic Forum in London said that the Islamic Market Index attempts to build stronger financial links between Britain and the Islamic world and will identify companies that meet traditional Islamic investment principles.
Cameron said that British capital is the biggest centre for Islamic finance outside the Islamic world and Britain will become the first country outside of the Islamic world to issue such a bond.
Sukuks will pay investors a fixed return based on the profit generated by an underlying asset.
Global Islamic investments are expected to be worth around £1.3 trillion next year, a rise of 150% since 2006.
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By GlobalData"This means the creation of a new way of identifying Islamic finance opportunities — a world-leading Islamic Market Index," Cameron 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 as one of the great capitals of Islamic finance anywhere in the World.
"The Treasury is working on the practicalities of issuing a bond-like Sukuk worth around £200 million," he added.
