Dubai: Emirates NBD PJSC, the biggest bank in Dubai, plans to open up to more foreign shareholders as the United Arab Emirates eases rules to attract international investors.
The lender intends to seek approvals from shareholders and regulators to boost its foreign ownership limit to 40 per cent, according to a statement. The bank will also implement an immediate increase in its foreign ownership cap to 20 per cent from 5 per cent after having obtained regulatory approvals.
Emirates NBD's plan comes after First Abu Dhabi Bank PJSC in July proposed removing a cap on the foreign ownership limit on its shares. The Dubai lender's first-half profit jumped 49 per cent as it benefited from the sale of a stake in its card payments processing unit.
Emirates NBD could be included in the emerging market benchmarks compiled by MSCI Inc. and FTSE Russell in the first half of next year, triggering inflows of about $426 million, according to estimates by Mohamad Al Hajj, an equities strategist at EFG-Hermes Holding in Dubai. Liquidity in the stock would have to pick up for it to meet the criteria required by the compilers, he said by email.
Foreigners currently hold 5 per cent of Emirates NBD shares and Dubai's government 55.76 per cent, according stock exchange data. The shares have gained 29 per cent this year compared with a 9 per cent increase in the benchmark Dubai index.
The increase in FOL "will strengthen the U.A.E.'s proposition as one of the most attractive economies for foreign direct investment and contribute to increased liquidity and depth in the UAE's capital markets," Emirates NBD Chairman Sheikh Ahmed Bin Saeed Al Maktoum said in the statement.
"Having foreign investors is great for local companies because it really raises the bar in terms of the requirements for transparency, for corporate governance, for profitability," Tarek Fadlallah, chief executive officer of the Middle East unit of Nomura Asset Management in Dubai, said in an interview with Bloomberg TV.