Abu Dhabi stocks rose the most since March on bets the government may permit foreigners to buy shares of Emirates Telecommunications Corp. (ETISALAT), the largest publicly- traded company in the United Arab Emirates. Saudi shares gained.
Etisalat, as the phone company is known, advanced the most since January even after saying it’s not aware of a decision to change the law that governs foreign ownership. The ADX General Index (ADSMI) rose 0.6 percent, the most since March 25, to 2,454.47 at the close in Abu Dhabi. The Bloomberg GCC 200 Index (BGCC200) climbed 0.7 percent after Saudi Arabia (SABIC)’s Tadawul (SASEIDX) rallied 1.3 percent, the most since April 21. Bank Nizwa (BKNZ) jumped 13 percent in the trading debut of the first Omani Shariah-compliant lender.
A law that governs Etisalat may be amended to allow foreign and institutional investors to own the shares, Emarat Alyoum reported last week, citing people it didn’t identify. A change will help widen ownership of shares beyond U.A.E. citizens and give overseas investors’ access to Etisalat, which may post a 26 percent increase in profit this year, according to the mean estimate of eight analysts on Bloomberg.
“If the speculation is true, this would be good for the market as it could attract liquidity to the heavy-weighted stock, especially from foreign investors,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities, the 21st most active brokerage of 53 by value traded in May, according to the Dubai Financial Market. A change in the foreign ownership structure of the stock may help boost the U.A.E.’s chance of being promoted to emerging market status at MSCI Inc. (MSCI), he said.
