Oct 28 - The UK government announces the first Islamic bond to be issued outside of a Muslim country, as part of a drive to sell London as a global centre for Islamic finance. David Pollard reports.
It's big business, and London wants a bigger slice of it. Islamic investment has helped build landmarks in the capital like the Olympic Village - and the Shard. Such finance is set to grow - as much as 50% faster than traditional banking. That's according to the UK government, which is tempting Muslim investors with a new bond - or 'sukuk' - based on Islamic principles. Prime minister, David Cameron, announced the bond at the World Islamic Economic Forum in London. It'll be worth a modest £200 million to start with. But it'll be the first Islamic bond issued outside of a Muslim country. And it should bring a larger share of the £1.3 trillion of global finance the Muslim world is expected to generate by next year. SOUNDBITE (English), UK Prime Minister, David Cameron, saying: "The growth of Islamic finance means there's 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." At the core of Islamic finance is the belief that money has no intrinsic value. Earning interest is forbidden. The new bond will, instead, pay investors returns based on the underlying asset. Sending out the same message that came from UK finance minister George Osborne on his recent visit to China. That London is open for new business - on terms to suit the client. Back home, he told an audience at Thomson Reuters he had a mission. To make London the global hub for offshore trading in China's currency, the remnimbi. SOUNDBITE (English), UK Finance Minister, George Osborne, saying: "What's clear is that the Chinese see the internationalisation of the remnimbi as a key part of their economic reform and they see London as playing a key role in that. And I think that's a great opportunity for what we've always done well in this city, which is being the world centre for commerce and finance." David Cameron also told the Forum a new London Stock Exchange index would be launched. It will help identify other investments compliant with Islamic principles. And the Forum itself is a first for London, too - the first time in its nine-year history that it's been held in a non-Muslim country. == This is 'Reuters David Pollard in London for Radio Television Brunei News.'' ======