The Economy & Commerce Ministry has issued an instruction that foreigners should be permitted to invest directly in stocks listed on the Doha Securities Market (DSM - stock exchange). Implementation of the new regulations is expected to take about six months.

Amendments will be made to listed companies' memoranda of association to permit foreigners to own up to 25 per cent of issued capital. The decision followed a study by the DSM, which recommended a broadening of the investor base. The ministry attributed the move to the government's broader efforts to open the economy to foreign investment.

The reform, which came as a surprise to most analysts, bypasses a key provision of the long-awaited mutual funds law. Yet to be ratified, the law would allow foreigners to invest indirectly in local equities (MEED 23:7:04).

Share prices on the DSM immediately rose on the news, recovering from a two-month-long corrective phase. The index stood at 5,561.23 on 4 August, up by more than 2 per cent over the course of the week.