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Qatar raises foreign ownership level before MSCI upgrade

qatarSEQatar raised the foreign ownership limit for shares listed on Doha’s stock exchange, less than a week before an MSCI Inc. upgrade to emerging market status. The benchmark index rose.

Investors outside the six-nation Gulf Cooperation Council will be able to hold as much as 49 percent of a company listed on the Qatar Stock Exchange after Emir Sheikh Tamim bin Hamad Al Thani gave instructions to raise the limit from 25 percent, state-run Qatar News Agency reported late yesterday. The Ministry of Economy and Commerce and the Qatar Financial Markets Authority will take necessary measures to put directives into effect, the news agency said.

“Clearly, it’s done with the MSCI in mind,” Julian Bruce, head of institutional trading at EFG-Hermes U.A.E. Ltd. in Dubai, said by phone. “If normal convention is followed, each individual company has to hold an extraordinary general meeting to approve the change in its structure. With the MSCI event right upon us, you would assume that it might not be able to go through in time.”

Qatar’s index has gained 49 percent in the past 12 months amid bets an upgrade to emerging from frontier markets status would lure investors. MSCI on May 14 named 10 Qatari companies, including Qatar National Bank, Industries Qatar QSC and Doha Bank QSC to its emerging markets gauge. The switch may attract about $649 million to the bourse, HSBC Holdings Plc said in a note to investors May 12.

Qatar’s QE Index jumped 0.8 percent to 13,499.56 at the close in Doha, the highest since at least 1998 when Bloomberg started tracking the market. The gauge rose for a fourth day, with 1.7 billion riyals ($467 million) of shares traded compared with a one-year daily average of 560 million riyals.

Masraf Al Rayan gained 3.2 percent to 60.50 riyals, the highest level on record. It has gained 22 percent in a six-day winning streak. Vodafone Qatar surged 2.9 percent to 19.25 riyals. Both Masraf and Vodafone are among companies to be included in MSCI’s developing-market gauge.

“It’s fantastic news for the market,” Nayal Khan, head of institutional sales and trading at Naeem Holding in Dubai, said by phone today. An increase in foreign ownership limits will also improve inflows of funds from “active investors” from global emerging markets to Qatar, he said.

The proportion of non-Qatari ownership will be calculated based on the total capital of each company and not its non-tradable shares, Qatar News Agency said.-Bloomberg