U.K. to sell Islamic bond
The U.K. government wants to be the first in the non-Islamic world to issue a sukuk, a bond complying with Sharia law. The issue is expected to raise $324 million. British companies such as HSBC and Tesco have already issued Islamic bonds, which pay no interest but give the investor a share of the profit from an underlying asset. For them, this was a way to tap into Middle Eastern investors' huge cash reserves. Given that the issue is so small, the U.K. government looks more interested in making a political point than raising money. One of the government's top priorities in finance is to solidify London's status as a global financial hub, fighting off the EU's encroachments and opening up the City to international players. The U.K. recently promised Chinese banks the long-sought opportunity to operate branches rather than subsidiaries in London. Now it is making an overture to Islamic financiers with what is basically a marketing campaign rather than a bond issue. Finance minister George Osborne even penned a column for the Financial Times about the potential of Islamic finance.
Sukuk.me Wire External StoryFrom Source: Bloomberg - Read full article here
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