Qatar’s Cabinet approved a draft law that will allow overseas investors to own up to 100% of listed companies, according to the state-run Qatar News Agency.
Should the law be implemented, companies would have to approve increases in foreign ownership on a case-by-case basis, Bloomberg News reported.
The decision could trigger inflows of about $1.5 billion into listed companies that would earn bigger representation in global benchmarks, according to estimates by investment bank EFG-Hermes.
Qatar eased rules on foreign property ownership in October last year in an attempt to make the sector more attractive to expatriates, foreign investors, and real estate funds.
Foreign ownership: A regional trend
The gas-rich nation is following similar decisions by other Gulf countries as they seek to attract inflows from abroad. In 2019, the UAE said it would allow foreigners to own 100% of businesses across industries and Saudi removed a cap on ownership of publicly traded companies for foreign strategic investors.
Stocks that could benefit the most include Qatar Islamic Bank SAQ, Masraf Al Rayan QSC, and the Commercial Bank of Qatar, the investment bank said. Their shares climbed 8.3%, 5.5%, and 10% on Thursday, respectively, leading gains among members of the main gauge.
The Qatar Stock Exchange on April 15, 2021, vaulted 294 points, and its key index settled near 10,900 levels.
Foreign funds’ substantial buying interests led the 20-stock Qatar Index zoom 2.97% to 10,899.06 points, having touched an intraday low of 10,714 points.
The banks and financial services index shot up 3.11%, consumer goods and services (2.08%), industrials (0.81%) and real estate (0.48%); whereas transport declined 1.27%, insurance (1.21%) and telecom (0.67%).