The Qatar Stock Exchange (QSE) has welcomed the cabinet decision of increasing the foreign ownership limit (FOL) of four leading banks in the country with the expectation that the approval will contribute to robust investment inflows into the listed companies.
The cabinet meeting, chaired by HE Sheikh Khalid bin Khalifa bin Abdulaziz al-Thani, Prime Minister of Qatar, had given approval to Qatar National Bank (QNB), Qatar Islamic Bank (QIB), Commercial Bank and Masraf Al Rayan to raise their FOL up to 100 percent.
“We value and welcome the cabinet’s approval of increasing the percentage of FOL in (four) local banks to 100 percent, and this will contribute to increasing investment flows in listed Qatari companies,” QSE chief executive Mr. Rashid bin Ali al-Mansoori said in a tweet.
The decision is expected to help attract more investments in the banking sector, which is already robust and profitable and it will also boost the country’s economic activity and attract overseas funds in efforts to diversify the economy, Mr. Al-Mansoori said.
Qatari banks ranked first in the Arab world in terms of profit indicators. The banks and financial services sector, which has 13 listed entities, reported 12.66 percent year-on-year growth in cumulative net profit to $3.49 billion against an 8.04 percent fall in the comparable period of 2020. The sector contributed about 62 percent of the total net profits of the listed companies in January-June 2021.
According to market sources, higher FOL would ensure higher weights in the emerging markets of the global indices, which in turn, means new money from international funds to match the new weight. The indices calculate the weight of each company based on the percentage ownership available to investors (local, regional and international).
Earlier, Mr. Al-Mansoori had stated that the bourse’s strategy has been to continue to increase Qatar’s weight in the MSCI emerging markets index by increasing the foreign ownership levels and liquidity of the listed companies.