BY MOBIN PANDIT
DOHA: Analysts and investors view Industries Qatar’s move raising its foreign ownership limit recently as a strong lead for the market and say they hope other listed entities with lower foreign ownership caps would soon follow suit.
Fundamentally strong and large cap Industries Qatar (IQ) has upped its foreign ownership cap to 12.25 percent from 7.5. In other words, the company has increased the amount of stocks non-Qatari investors can trade in to 12.25 percent of the total.
The company had 30 percent free float shares (stocks that are available for trading on the market), 25 percent of which could be traded in by foreigners. This means that only 7.5 percent of the company’s total shares could be bought by non-citizens earlier.
Since the free float shares have now been increased by IQ to 49 percent, this ratio (in the total) has climbed up to 12.25 percent.
“It’s a great move,” was how prominent stock and financial analyst, Dr Nasser Al Shafi reacted to the development “IQ has set a precedence for other listed entities to follow.” When told that allowing foreigners to have increased ownership in listed companies could send wrong signals to the Qatari community since the local primary as well as secondary equity markets are basically seen as redistributors of wealth, Al Shafi said he was all for giving foreign investors a fair chance.
“At the same time it must be made sure that they (foreigners) don’t control an entity by having majority stakes,” said Al Shafi.
It is time Qatari listed companies thought seriously in terms of opening up to foreign capital, he said. “It’s a chance for them to mobilise foreign capital. They can diversify and expand.”
Besides, that would boost the inflow of foreign investment into the country, said the analyst. Citing the example, he said Qatar Steel that is part of IQ (which is a holding company) should now, for instance, think in terms of diversifying overseas.
Qatar Telecom and Vodafone Qatar have both 100 percent free float shares but a majority of listed entities on the Qatari bourse (Qatar Exchange) being largely state-dominated have quite low foreign ownership caps.
