Qatar National Bank getting ready to lift its foreign ownership limit to 49%
Qatar National Bank, the largest lender in the Middle East and Africa by assets, is preparing to allow higher Foreign Ownership Limit (FOL) of up to 49% in its capital. Earlier, the FOL had been set at 25%.
This is a very important move and is sure to give the bank much more visibility in the international arena, reported Gulf Times.
Yesterday, QNB announced that it was going to seek shareholder approval for the same.
“An extraordinary general assembly will be convened to present and approve the proposed amendment to QNB’s Articles’ of Association by adding an agenda item in respect of the above after securing the appropriate regulatory approvals of the proposed amendment,” a QNB spokesman said.
As a result, Qatari stock markets surged 4.97%, easily reversing the declines in earlier sessions. The upbeat market announcement helped push the benchmark index up to gain 410.38 points to 8,663.04, the biggest leap in 15 months, reported The Peninsula.
In a heavily traded session, QNB hit the 10 percent daily limit and sent the banking sector index hurtling higher to finish at 6.23% higher. The bellwether Industries Qatar (IQ) also surged 10%.
QNB’s announcement means that index trackers, especially the international investors who track the emerging market (EM) indices, will increase their allocation to Qatar mainly in QNB, Amwal Asset Management chief Talal F Samhouri told Qatar Tribune.
This in turn will give the chance for a larger turnover of other stocks, since sellers of QNB will have to recycle their proceeds to other Qatari stocks, he said.
“The increase also was due to the lower valuation of the Qatari market compared to other GCC markets. The market already had good conditions for a rebound when the news about QNB’s plans came. It’ll attract active investors as they usually look for liquid markets,” the fund-manager said.
“We expect other companies to follow suit and increase the FOL,” Samhouri said.
So far, Islamic Holding Group, Nakilat, Milaha, Ezdan Real Estate, Commercial Bank, Aamal Company, Qatar General Insurance and Reinsurance and Doha Bank are among those that have received approval from the Qatar Central Securities Depository to enhance the FOL up to 49%.
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