Dubai: Foreign investors can from today hold a combined 49 per cent in the UAE telecom giants Etisalat and du. Both entities won internal approval to raise the ownership limit for non-UAE nationals from 20 per cent to 49.
They thus join UAE market heavyweights such as TAQA (Abu Dhabi National Energy Co.) – which raised the limit to 49 per cent - and Emirates NBD – to 40 per cent.
Currently, non-Gulf nationals hold less than 1 per cent in du and about 5 per cent in Etisalat.
"The increase in ownership limits would allow for strategic partnerships and inflows (both passive and active) from key foreign players, especially as Etisalat and du look abroad for increasing revenues and user base," said Sameer Lakhani, Managing Director at Global Capital Partners. "And to capitalize on accessing entry into 5G markets."
8%Gains made by Etisalat shares in 2020
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When the telecom majors announced their plans, the stocks gained an immediate lift, and which has rubbed off on the wider ADX and DFM indexes as well. UAE stocks have been among the best performers in the region since the start of the year, and the momentum is primed to pick up further as the vaccination drive goes bigger and wider.
Listed companies will soon be announcing their 2020 results, and investors will be watching closely whether banks will be able to emerge relatively unscathed from an exceptionally difficult year. But there are no such concerns about Etisalat and du, and the general impression is they closed out the fourth quarter with another set of upbeat numbers.
du confirmed that no single entity will be allowed to hold more than 5 per cent in the company's capital from now on, whether directly or indirectly.