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Business

UK favors Islamic index for London Stock Exchange

The British Prime Minister has announced that his country is getting serious about becoming the first Western nation to issue a sovereign Islamic bond. It's part of the UK's drive to become a leading Islamic finance hub.

Addressing the World Islamic Economic Forum in London, British Prime Minister David Cameron announced official plans for the UK to become the West's first country to issue a sovereign sukuk, or Islamic bond.

He said the issue would be worth around 200 million pounds ($323 million, 235 billion euros) and would be implemented next year, providing an important liquidity management tool for Britain's six Islamic lenders.

The move dovetailed with the UK's push to establish the country as a leading Islamic financial hub amid fiercer competition with other centers in Asia and the Middle East.

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The global Islamic banking industry was expected to tip $1.8 trillion (1.3 trillion euros) by the end of 2013, the consulting company Ernst & Young reported in a recent study.

"I want London to stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world," Cameron said in his address.

He explained that an Islamic index at the London Stock Exchange would identify companies compliant with Shariah law, forbidding the charging of interest and involvement in businesses dealing in alcohol or gambling.

hg/mkg (dpa, Reuters)

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