Saudi stocks jump on optimistic comments by regulator

Updated 19 June 2017
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Saudi stocks jump on optimistic comments by regulator

DUBAI: Saudi Arabia’s stock market surged on Monday after a regulatory official was quoted as predicting the bourse would enter MSCI’s emerging market index sooner than most investors had expected.
Mohammed El-Kuwaiz, vice chairman of the Capital Market Authority (CMA), was quoted as saying by Asharq Al-Awsat that he expected the Saudi market to be included in the index by the end of 2018.
MSCI will announce late on Tuesday whether it is putting Saudi Arabia on a list for possible index inclusion. Most funds think Riyadh has done enough to be included, but if MSCI follows its usual timetable, the actual entry would occur in mid-2019. However, MSCI has the flexibility to move faster if it wishes.
The Tadawul All Share Index (TASI) rose 2.4 percent, its largest single-day gain since November, although trading volume was only moderate.
“Local funds which have been somewhat skeptical of MSCI putting Riyadh on review reacted to the comments made by the vice chairman,” said Mohamad Al-Hajj, macroeconomic strategist at EFG Hermes.
Some of the top-performing shares on Monday were those that may eventually be added to MSCI’s standard emerging market index, including Banque Saudi Fransi, which jumped 7.5 percent, and medical insurer BUPA Arabia, up 6 percent.
Although progress toward inclusion would be a net positive for the Saudi stock market, some analysts are cautious about speculative fever trumping fundamentals, which are not particularly supportive. Saudi Arabia’s 12-month forward price-earnings ratio is 13.9 while the MSCI Emerging Market Index is at 12.
“While we believe that inclusion in watch list for Saudi Arabia will lead to enhanced market liquidity and generate more interest in the Saudi market, we caution investors to be wary of irrational exuberance as inclusion is unlikely to change market fundamentals which currently remain tepid,” said a note by Al-Rajhi Capital.
Meanwhile, Dubai’s National Central Cooling Co. (Tabreed) surged its 15 percent daily limit to 2.12 dirhams after French power and gas group Engie agreed to buy a 40 percent stake for 2.8 billion dirhams ($763 million) from Abu Dhabi’s Mubadala.
Mubadala will convert its mandatory convertible bonds into shares, with 1.086 billion shares to be transferred to Engie at about 2.62 dirhams each. The Abu Dhabi fund will keep 42 percent after the deal’s approval.
Analysts at Arqaam Capital said they were keeping their target price for the stock unchanged at 2.32 dirhams, as Tabreed’s growth would benefit from Engie’s experience but share buy-backs by the company were no longer likely.
Drake & Scull climbed 1.2 percent after its acting chief financial officer told reporters that the company had not been affected by Qatar’s diplomatic rift with some of its Gulf neighbors, although DSI was not bidding for new business in that country.
DSI expects to complete a plan to reduce its capital by 75 percent by the end of the third quarter, deferring the process by one month, its chief executive said.
The Dubai index added 0.4 percent. Qatar lost 1.3 percent with commodity-linked companies some of the worst performers as Brent oil stayed near its 2017 lows. Drilling rig provider Gulf International Services declined 4 percent and petrochemical maker Industries Qatar fell 2.7 percent.
Abu Dhabi’s index edged down 0.2 percent, weighed down by a 2.9 percent decline in Dana Gas, the most heavily traded stock on Monday.


UAE to loosen visa rules for investors and innovators

Updated 21 May 2018
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UAE to loosen visa rules for investors and innovators

  • UAE cabinet announces the launch of an integrated visa system to attract talent and talent in all vital sectors of the national economy
  • The Council also announced changes in the system of foreign ownership of companies in the country, which allows the acquisition of 100% of the global investors by the end of the year

DUBAI: The United Arab Emirates, home to financial hubs Abu Dhabi and Dubai, is loosening its residency laws and will grant long-term visas for up to 10 years to investors and highly-skilled professionals.
The 10-year residency visas will be granted to specialists in science, medicine and research, and to “exceptional students.” The state-run WAM news agency says the plan aims to attract global investment and innovators.
The UAE Cabinet approved the new rules on Sunday, saying plans are also on track to allow foreign investors 100 percent ownership of their UAE-based companies this year.
His Highness Sheikh Mohammed bin Rashid Al Maktoum affirmed that the UAE will remain a global incubator for exceptional talents and a permanent destination for international investors. “The UAE has been open, governed by tolerance and contributed to by all who live on its land.
“Our open environment, tolerant values, infrastructure and flexible legislation offer the best opportunities to attract international investment and exceptional talent in the UAE,” he said. “Our country is the land of opportunity, the best environment for realizing human dreams and unleashing their extraordinary potentials.”
The new regulations include raising the percentage of global investors’ ownership in companies to 100% by the end of the current year. He directed the Ministry of Economy in coordination with the concerned parties to implement the decision and follow up on its developments and submit a detailed study in the third quarter of this year.
The new regulations approved by the Council of Ministers and the authorities concerned have also set the procedures for implementing them to grant investors residence visas of up to ten years for them and all members of their families, as well as granting residency visas of up to ten years for specialized competencies in the medical, scientific, research and technical fields.
The new regulations also include visas for students studying in the country for five years and a 10-year residency for exceptional students.
Under current laws, foreign companies must have an Emirati owning 51 percent of the shares, unless the company operates in a free zone. Major brands Apple and Tesla are believed to be exceptions to the rule.