At Direct Market Touch we were intrigued to see that the new Islamic Market Index has been launched by David Cameron on the London Stock Exchange on Tuesday. It comes as part of a wider effort to improve links between Britain and the flourishing market in Islamic Finance.
The Prime Minister is said at the launch that British capital is the biggest centre for Islamic Finance outside of the Islamic World. He wants London to stand alongside Dubai as one of the greatest capitals of Islamic finance in the world. He also said that he wants the UK to be the best place to start, grow and do business. The market of Islamic finance has skyrocketed since 2006, with its value expected to hit £1.3 trillion next year.
This branch of finance abides by Islamic law, which doesn’t allow the charging of interest. Deals must also be based on tangible assets, which means there can be no speculation and traders cannot deal in futures. Many believe this makes it a superior market for more stable trade.
In the UK there are already more than 20 banks that deal in Islamic financial products, more than any other country in the western world. The London Stock Exchange has also seen 49 sukuk listings (Islamic bonds) in the last 5 years. These listings are said to total some 34 billion USD.
The Government has announced their plans to release a £200 million Islamic bond and in doing so they hope to attract new money to London. The ninth World Islamic Trade Economic Forum is being held in London; the first time the event has been hosted by a non-Muslim country. However London seemed to be a natural choice for the forum, considering its vastly multicultural makeup. It is hoped that holding the event outside of the Muslim world will build bridges and benefit relationships amongst world leaders.
The team at Direct Market Touch feel this is certainly a positive step for trade and hopefully the wider world. If you’re interested in trading the markets, feel free to visit our website and check out our range of services. You can also follow us on Twitter, like us on Facebook and connect with us on LinkedIn for regular updates!