Union Properties plans to raise the cap on how much foreign investors can own in the developer to 25 per cent from 15 per cent, it said yesterday.
The Dubai-based company is the latest firm in the UAE and Qatar to raise its foreign ownership limit ahead of the upgrade of the two countries to emerging market status by the index provider MSCI in May.
Separately yesterday, Al Khaliji Commercial Bank in Qatar said it had approved increasing its foreign ownership limit from 25 per cent to 49 per cent.
“This change allows the bank to open up to international investors and increase the liquidity of the bank’s shares,” Al Khaliji said in a statement.
A foreign ownership of 25 per cent is considered crucial to inclusion in the MSCI Emerging Market Index. It was announced in June that both countries would be upgraded from frontier market status, a move expected to help to entice a wave of foreign capital.
Currently 14.71 per cent of Union Properties’ share are owned from outside the Emirates. In a statement, Union Properties said its board of directors had recommended raising the cap to 25 per cent.
The developer's stock on the Dubai Financial Market rose 4.6 per cent yesterday to Dh2 a share. The stock has surged more than 365 per cent over the past year.
Shares in Al Khaliji Bank rose o.4 per cent on the Doha exchange yesterday to close at 20.5 riyals, and are up 19.1 per cent over the past year.
Last week, Mashreq raised the limit on foreign ownership of its shares to 49 per cent, The property developer Deyaar has also said it would allow foreign investors to own shares for the first time, up to a limit of 25 per cent.
Under UAE rules, most companies listed in Abu Dhabi and Dubai may choose to allow investors from outside the UAE or GCC to buy up to 49 per cent of their shares. However, many choose to set their foreign ownership limits at a lower level and some do not allow any foreign ownership at all.
In July 2012, the state-controlled telecoms company Etisalat said it was in talks with the Government about lifting a ban on foreign ownership of its stock. Shares of Etisalat remain accessible only to Emiratis.
In recent months more and more UAE companies have increased the number of shares they allow foreign investors to buy as they take advantage of growing demand from overseas.
Abu Dhabi Islamic Bank said in November that it was working on a plan to give international investors access to its shares.
And in December, Dubai Islamic Bank approved a plan to lift the amount of the bank's shares that foreign investors can buy to 25 per cent from 15 per cent.
tarnold@thenational.ae
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