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Qatar foreign ownership limits won’t change for 2011
With ownership limits likely to remain in place – chairman; Secondary bourse to become operational within six months; Capital requirement to range from 5-10 mln riyals
May 31, 2011 2:47 by Reuters
Foreign ownership limits in Qatar, a key issue in the Gulf Arab state’s potential upgrade by an influential index compiler, will remain at 25 percent for the coming year, the chairman of Qatar Exchange said on Monday.
“The ownership limits will continue to be 25 percent for the time being. We will see, maybe in a year from now we will change it, but for now it will remain the same,” Hussain Al-Abdulla told Reuters on the sidelines of an exchange event.
“We will change it gradually in the coming months, but not now.”
Index compiler MSCI will announce in June whether it will upgrade the UAE and Qatar from frontier market to emerging market status, a move that would boost liquidity on local markets.
Foreign ownership restrictions have been a central worry for MSCI, with Qatar limiting stocks to maximum 25 percent foreign ownership. UAE companies limit foreign holdings to about 49 percent, but many strategic firms allow little or no non-UAE involvement.
Qatar would likely see anywhere from $1.5 billion to $4 billion in new foreign investment should it be upgraded, Qatar Exchange Chief Executive Officer Andre Went said in separate comments.
Though Qatar and the UAE have been rebuffed twice by MSCI for failing to raise foreign ownership limits and switch to a new settlement system, both have moved to address key issues cited in MSCI’s 2010 review.
Qatar’s bourse announced earlier on Sunday that it will set up a secondary market for small-to medium-sized businesses to help them access funding and provide investors more choice.
Abdulla said the new market would become operational in between six months to one year’s time.
“There will be different criteria for listing (from the main bourse), in terms of required capital. It’s going to be small, ranging between five million to ten million riyals.”
(Reporting by Regan E. Doherty; Editing by Dinesh Nair and Amran Abocar)