Qatar exchange moves to tackle illiquidity ahead of ugrade to emerging market status
Qatar has raised the foreign ownership limit of stocks listed on the Qatar Stock Exchange (QSE) to 49 per cent of equity, according to a bourse announcement on 27 May.
That means companies will no longer need to individually amend their articles of association if they want to raise their levels, a process that usually took several months to complete.
The increase drastically improves the amount of shares available for foreign trade. Previously, foreign investors were allowed to hold a maximum of 25 per cent of free float, which in many cases amounted to just 5 per cent of the companys total share capital.
Foreign investors are defined as citizens living outside of the GCC, while GCC citizens will be considered as local investors.
The instruction comes from the emir of Qatar, Sheikh Tamim bin Hamad al-Thani, president of the Supreme Council for Economic Affairs and Investment (SCEAI).
The Ministry of Economy and Commerce and the Qatar Financial Markets Authority [QFCA] shall immediately take the necessary measures to implement these instructions, said Finance Minister Ali Shareef al-Emadi, secretary-general of the SCEAI.
The move is set to tackle QSEs market illiquidity ahead of its upgrade by MSCI to emerging markets status, which is set to take effect on 1 June. The upgrade is set to attract $500m to $1bn in foreign fund inflows from passive index-tracking funds.