Upcoming MSCI decision brings about efforts to increase foreign ownership limit in Qatari companies
The recent comments come following the news that the MSCI will be re-evaluating whether to upgrade Qatar's status from frontier market to an emerging market.
HE Yousef Hussain Kamal, minister of Economy and Finance and Chairman of the Financial Markets Development Committee, stated that the parties responsible for the financial markets in the State of Qatar, are making extensive efforts to provide an investment environment that is more attractive for foreign investors to direct their investments towards the Qatari market through encouraging several listed companies to increase the maximum ownership percentage allocated for non Qataris.
Previously, stringent foreign ownership limits were identified as a major limitation on the upgrading of Qatar’s status. However, in the past few weeks the finance minister has made numerous comments that show Qatar pushing to attain emerging market this year. The Qatar Exchange in a press release stated the Minister of Economy and Finance had highlighted many examples for this trend noting that the foreign ownership limit (FOL) of several large listed companies is at or close to 25 percent of their market capitalisation. Doha Bank is the most recent example of this trend, recently changing their FOL to 25 percent of the market capitalisation in accordance with an amendment on the Bank’s articles of association aimed at allowing this change.
He also noted that several companies have actually exceeded this percentage as Ooredoo and Vodafone have FOL of 100 percent, while the maximum foreign ownership limit in Masraf Al Rayan is set at 49 percent. “Some other companies have expressed their willingness to amend the current FOL set at 25 percent of their free float shares to 25 percent of their full capital, HE the Minister added”.
The Commercial Bank Qatar (CBQ) and Qatar Islamic Bank (QIB) are examples of QE listed companies that have responded positively to this change and have recently requested Qatar Exchange to increase the number of their shares available to foreign investors to 25 percent to their total market capitalisation. It is expected that within 6 to 9 months these changes can be implemented after modifying their articles of association, and other companies are expected to follow this approach, said the release from QE.