Etisalat foreign ownership news give flip to Abu Dhabi index

Dubai: Shares of Etisalat jumped to its highest level since July 2008 after the company lifted of a ban on foreign ownership of etisalat, helping the index jump nearly 3 per cent.

Etisalat jumped 15 per cent daily limit to Dh13.80, its highest level since July 2008.

The company said local and foreign institutions and expatriate individuals would be allowed to buy up to 20 per cent of its shares, and currently only UAE investors can buy the stock.

“Etisalat’s news positively impacted the sentiment in Abu Dhabi. There was some speculative buying in anticipation of inclusion in the index,” Muhammad Shabbir, head of equity funds & portfolios at Rasmala Investment Bank, adding “there was interest in other names also.”

The Abu Dhabi Securities Exchange General Index, which has been an underperformer compared to Dubai index, jumped 2.92 per cent to end at 4,755.60, its highest level in six months.

Early stage:

“At this stage it still an announcement and investors can’t take exposure. We are positive on the stock, but the hype seems premature at this stage,” Shabbir added.

This could pave the way for the inclusion of the stock in the MSCI emerging market index, analysts said.

“Fundamentally it’s a dividend yielding blue chip, there might not be upside in terms of growth, but this was an event play on Tuesday,” Shabbir said, adding there could be some passive money coming in as it has a dividend yield of 6 per cent.