Qatar’s ruler orders listed equities to increase foreign ownership cap

29 May 2014   Category: News, Global, Middle East   By Daniel Shane

The ruler of Qatar has ordered all of the companies listed on the local bourse to increase their foreign ownership limit to 49% ahead of the Gulf state’s upgrade to MSCI’s Emerging Markets index.

A statement to the Qatar Exchange on Tuesday said that 33-year old emir Sheikh Tamim bin Hamad bin Khalifa Al Thani, who is also head of the Supreme Council for Economic Affairs and Investment (SCEAI), instructed all listed firms and the Qatar Financial Markets Authority to make the changes immediately. Foreign ownership of equities listed in the country was previously 25%, although there had been some exceptions.

The Qatari market, along with fellow Gulf Arab state the UAE, is due to be upgraded by indexing provider MSCI at the end of this week. A forecast by BNY Mellon earlier this year indicated that the decision could result in between US$1 billion and $2 billion in foreign capital flowing into the region.

According to the instructions from Qatar’s Sheikh Tamim, entities from outside the six nation Gulf Co-operation Council bloc (GCC), which also includes Saudi Arabia, Bahrain, Kuwait and Oman, will be permitted to hold up to 49% of a Qatar-listed company’s shares. Entities within the GCC will be subject to no foreign ownership limits.

The foreign ownership percentage of each listed company will be calculated according to its total capital, rather than the free float, the bourse statement said.

According to Bloomberg data, the Qatar Exchange Index has risen by 35.66% in the year-to-date.

The country is expected to spend more than $200 billion on new infrastructure ahead of its hosting of the 2022 FIFA World Cup.

Qatar is an absolute monarchy that has been ruled by the Al Thani family since the mid 19th century, and decisions made by its emir are binding.