Commercial Bank of Qatar (CBQ) and Qatar Islamic Bank (QIB) have asked Qatar Exchange to increase the number of their shares available to foreign investors to 25 per cent of their market capitalisation, the exchange said on Wednesday.
The changes are expected to be implemented in six to nine months, an exchange statement said.
The statement was released before equity index compiler Morgan Stanley Capital International (MSCI) decides next week whether to upgrade Qatar to emerging market from frontier status. Qatar’s stringent foreign ownership limits have caused it to miss out on upgrades in the past.
Currently, foreign ownership limits for CBQ and QIB are 25 per cent of their free share floats – a smaller proportion of their total capital.
In its statement, the exchange noted that Doha Bank had recently raised its limit to 25 per cent of capitalisation, and predicted other Qatari companies would imitate CBQ and QIB. “Other companies are expected to follow this approach.”
The exchange quoted economy minister Youssef Kamal as saying: “Some other companies have expressed their willingness to amend the current FOL set at 25 per cent of their free float shares to 25 per cent of their full capital.”
Kamal said several companies had actually exceeded 25 per cent as Ooredoo and Vodafone Qatar had foreign ownership limits of 100 per cent. He said the government was keen to open its stock market further to foreign investors in order to make the country a regional investment hub.
It remains unclear, however, if Qatar’s latest moves will be enough to win it an MSCI upgrade. Ooredoo is owned 52 per cent by the Qatar government, 17 per cent by Qatari government-related entities and 10 per cent by the Abu Dhabi Investment Authority, leaving only a minority of shares open for trade in practice.
Qatar’s exchange said in 2011 that it was in talks with individual firms to raise foreign ownership limits, originally imposed to protect the country’s control of its assets, but that it did not plan any blanket increase.