World Economy

UK Aims to Be West’s Islamic Finance Hub

UK Aims to Be West’s Islamic Finance Hub
UK Aims to Be West’s Islamic Finance Hub

Britain is trying to build infrastructure to develop Islamic finance through regulations in insurance, sukuks, mortgages, taking it a step closer for it to become a western hub.

“UK aims to be a western hub for Islamic finance and build on our global importance as a financial center, we think Islamic finance as a new potential growth market and so we want to be a part of it,” Andrea Leadsom, United Kingdom’s economic secretary to the treasury, told the Gulf News.

“We think we have made quiet good strides towards developing our Islamic finance market,” Leadsom said.

The UK hosted the World Islamic Economic Forum last year and soon after that the government issued a £200 million ($35.48m)  sukuk, which was the first bond issue outside of the Islamic world.

“It was a huge success … we instructed the book runners to try and spread the issue as far they could across the Islamic world. We wanted it to be a commitment from the UK to support the development of Islamic Finance market,” Leadsom said.

The sukuk was oversubscribed 12 times, displaying enormous appetite from central banks, sovereign wealth funds across the globe.

The UK government is not planning to issue more sukuks, but would like to see more of companies and governments to issue more such bonds.

 UAE, Malaysia Join Hands

The United Arab Emirates and Malaysia said on Tuesday they have forged a partnership to develop capacity in the Islamic capital markets.

“This collaboration is also part of the Malaysia Security Commission’s broader efforts to foster greater strategic linkages within our counterparts in the (P)GCC countries to further the internationalization of the Islamic capital markets and facilitate more cross-border opportunities within the markets,” said Datuk Ranjit Ajit Singh, chairman of Securities Commission Malaysia.

The scope for cooperation between the countries is very wide, officials said. The companies may also look at dual listing among others, said Dato’ Sri Mohd Nijab Tun Abdul Razak, prime minister of Malaysia.

“We are keen to work with Dubai. Dubai wants to become one of the global Islamic hub. The potential for cooperation is enormous,” said Razak.