When it comes to capitalising on the growth of Islamic finance, the UK is well placed, TheCityUK’s
Global trends in Islamic finance and the UK market has found.
Citing figures from the report,
City AM’s William Turvill says that the UK leads the way for Islamic finance in the West. Globally, it is the fourth biggest for non-Muslim-majority countries.
Compared to the US, the UK has more than double (over 20) the number of banks offering Islamic financial services. Five of these are compliant with Shariah law.
Turvill quotes TheCityUK’s chief executive, Miles Celic, who points out a huge potential market in the difference between the current 1% of global Shariah-compliant financial assets and the fact that quarter of the world’s population is Muslim.
He indicates that an area where greater use of Islamic finance could be encouraged is infrastructure development. The Shard, the regeneration of Battersea Power Station and London’s Olympic Village are all “significant projects” which Islamic finance has already played a part in funding.
Celic adds: “Given the UK’s position as a world leader in innovation and development within the sector, we’re well-placed to capture this opportunity.”
City AM article
Helping Islamic finance to thriveThe Telegraph’s Lucy Burton highlights the legislative and lobbying nature of the report, calling TheCityUK “the City’s top lobby group”. According to Burton, the group is requesting that the Government ensures any post-Brexit laws do not have a negative effect on the current demand for Islamic finance.
With the assets of UK companies offering Islamic finance valued at more than £3.8bn in 2016, up 11% from 2014, TheCityUK’s adviser in international strategy, Wayne Evans, is asking the Government to safeguard the sector’s growth and put in legislation so that Islamic bonds can thrive.
In 2014, then chancellor George Osborne heralded the promotion of Islamic finance in the UK as key to making it “the undisputed centre of the global financial system”.
Evans agrees, telling
The Telegraph: “We're looking to keep lobbying, talking to [the Government] to make sure [it is] aware of the demand.”
He explains: “If we see more trade with non-EU countries, and encourage more trade with them, then obviously having expertise and a Shariah-compliant string to your bow has got to be an advantage.”
The Telegraph article
Islamic finance introduced to AlgeriaMeanwhile, Algeria’s new Government will be using the introduction of Islamic finance and the development of its stock market to “draw more investment into the economy as it struggles to cope with a sharp fall in energy earnings, according to an official document”, writes
Reuters’ Hamid Ould Ahmed.
This is the first time the introduction of Shariah-compliant Islamic finance has been openly mentioned by the Algerian authorities.
Ahmed reports on the Government’s “unusually blunt” statement: “The situation remains extremely tense for the budget. In the current situation, 2017 will end with real difficulties, while 2018 looks to be even more complex.”
To ease this pressure, the Government has said it intends to “strengthen the supply of banking products, including leasing and products of Islamic finance”.
Alongside this it will, according to an action plan cited by Reuters, “ensure the development of the capital market as well as the stock exchange to offer alternatives to financing of investment and capital increase”.
A drop of over 50% in the value of crude oil since the middle of 2014 has led to the announcement of these measures, which make up a section of wider reforms by Prime Minister Ahmed Ouyahia.
With such vast potential, Islamic finance could prove the key to kick-starting, or boosting, many economies. The UK has recognised its value and is reaping the rewards. If this example is anything to go by, the Algerian economy will too.
Reuters article
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