The country said foreign investors could take full ownership of the fully listed companies – Qatari stocks rose the most in a year – a move that could drive about $ 1.6 billion in flows.
The country says Qatari stocks have risen the most in a year as foreign investors can acquire ownership of fully listed companies, a move that could trigger more than ১ 1 billion in foreign inflows.
The cabinet has approved a draft law that would allow foreign investors to own up to 100% of listed companies, according to the state-run Qatar News Agency. If the law is enforced, companies will have to approve the extended limit individually.
According to investment bank EFG-Hermes estimates, the decision could flow about $ 1.6 billion in investments in listed companies that could achieve even greater representation by global standards. The Kiwi index gained 2.8% on Thursday, the highest level in more than a year since January.
Investor banks said the stocks that could benefit the most include Qatar Islamic Bank SAQ, Masraf Al Rayyan QSC and Commercial Bank of Qatar. Their shares rose 8.3%, 5.5% and 10%, respectively, on Thursday, leading gains among members of the original gauge.
The gas-rich country is following a similar decision in other Gulf countries because it wants to attract foreigners. In 2012, the UAE said it would allow foreigners to do business 100% and Saudi Arabia would remove a cap on ownership of publicly traded firms for foreign strategic investors.
Akbar Khan, senior director of asset management at Dohar Al Rayyan Investment, said the proposal was “another milestone in liberalizing the economy, with Qatar setting the standard for foreign ownership in the region.”
The ministers also announced an increase in epidemic-induced financial support for private businesses, particularly the expansion of a guarantee program that allowed some companies to receive interest-free orrow payments for salaries and rents by the end of September. Rail restaurants, saloons and other entertainment venues closed earlier this month as the country tightened restrictions to combat the second wave of coronaviruses.
Edmund Christu, Bloomberg’s intelligence analyst, said: “As the non-suspension program grows, lenders will have more time to verify customers’ ability to pay back arrears and improve cash flow.” There are lower performance-to-earnings ratios, but first-quarter earnings data suggest they have become more marginalized.
(Updates to share price closures in paragraph 3, add comments and contexts in seventh and eighth))
With the help of Walid Ahmed.