London is set to take the lead in Islamic finance in spite of recent moves by Paris to steal a march in the sector, said Ian Luder, the Lord Mayor of the City of London (Pic right).
UK has gradually changed its law and tax regime to accommodate the tenets of Islamic finance, but France has followed suit and touted itself as the host for Europe's first corporate sukuk, or Islamic bond, by October.
However, Luder predicted the French plan will be postponed, leaving London to lead, most likely through sovereign issuance.
"Given the amount the UK government is set to borrow (700 billion pounds over the next five years) I think it is more rather than less likely we will see a sovereign sukuk, I would say sometime in the next 18 months."
"I suspect the first issuance will be modest in size rather than a blockbuster... We will see the UK doing it first."
Luder's bullishness is understandable, given his role, and he also voices confidence that London will remain a hub for the hedge fund industry in spite of considerable competition from other cities.
"A successful hedge fund needs to be where the action is. And I think it is in London rather than Switzerland," he said.
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