UAE Etisalat shares soar after foreign ownership news

Etisalat shares soared to their daily limit on Tuesday at 15 percent to AED 13.80 following the UAE government’s announcement that it planned to allow foreign ownership on the previously restricted stock.

The news helped support the Abu Dhabi Securities (ADX) General Index, which rose on Tuesday 2.93 percent, or 135 points, to 4,756 points by midday.

The exchange had temporarily suspended trading on the stock on Monday shortly before revealing the news.

The landmark decision by the UAE will allow as much as 20 percent of the operator to be owned by foreign investors, the company said.

Etisalat, however, clarified on Tuesday that the decision will not come into effect immediately, as it is still subject to “legal and legislative procedures.”

Etisalat is 60 percent owned by UAE federal government through the country’s Investment Authority, while nationals presently own 40 percent.

Foreign investors have long sought access to Etisalat shares after the raising of foreign investment limits on a few other local stocks.

The move is seen also as one more step in fulfilling the emerging markets requirements. In May 2014, the UAE joined MSCI’s emerging markets index.

Although Etisalat is not included by the index provider, it is the second-largest operator in the Gulf behind Saudi Telecom.

Apart from UAE, Etisalat has operations in 19 countries across the Middle East, Asia, and Africa— including Egypt, Saudi Arabia, Morocco, and Nigeria. In Saudi Arabia, it owns a 27 percent stake in Etihad Etisalat (Mobily) as part of a consortium.