First Abu Dhabi Bank’s proposal is subject to the supervision of regulatory authorities and would require amendments to the current laws and policies. The change is subject to the supervision of regulatory authorities and would require amendments to the current laws and policies, the nation’s biggest bank said. The move has “the potential that other public companies in the UAE may apply similar measures,” it said.
The UAE said this month it’ll allow foreigners to own 100% of businesses across industries. The federal government will leave it to individual emirates to “decide the ownership percentage in each activity according to their circumstances,” said Prime Minister Sheikh Mohammed Bin Rashid Al Maktoum. The country is made up of seven emirates, with Abu Dhabi as its capital.
If publicly traded companies in the UAE allow foreigners to own 100% of their shares, they could attract about $4.9 billion in inflows from passive trackers of MSCI indexes, according to EFG-Hermes equities strategist Mohamad Al Hajj. Potential inflows by active investors could be “a multiple of that number,” he wrote in a report on Thursday.
First Abu Dhabi Bank shares climbed as much as 3.5 percent, the most since May 30, to 15.52 dirhams in early trading in Abu Dhabi. The UAE, the second-biggest Arab economy, currently caps foreign ownership of businesses at 49%, except in so-called economic free zones. First Abu Dhabi Bank’s shareholders in February approved raising its foreign ownership limit to 40% from 25%.
