Committee to decide on UAE industries open to full foreign ownership

Foreigners are set to be allowed to own up to 100 percent of onshore UAE companies following a directive announced this week. (Shutterstock)
Updated 24 May 2018
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Committee to decide on UAE industries open to full foreign ownership

  • Committee of representatives from UAE's seven emirates to decide on which industries are open to 100 percent foreign ownership.
  • Undersecretary for foreign trade & industry tells Bloomberg that new law's goal “is to attract quality investments and expertise and isn’t necessarily about the size or number of investments.”

LONDON: The UAE’s new law enabling foreigners to own 100 percent of onshore companies will be limited to specific industries deemed essential to the country’s economy, according to a senior government official.
Abdulla Al-Saleh, undersecretary for foreign trade & industry at the UAE’s Ministry of Economy, told Bloomberg that a final decision had not been taken on what industries to include in this week’s landmark decision to allow foreigners to fully own non-free zone companies.
Al-Saleh said a committee — made up of representatives of the country’s seven emirates — would make a decision on which industries to initially include, and would add further industries and companies in the future.
The law’s goal “is to attract quality investments and expertise and isn’t necessarily about the size or number of investments,” he said in a telephone interview with Bloomberg.
The UAE’s Prime Minister and Ruler of Dubai Sheikh Mohammed bin Rashid Al-Maktoum said the ownership changes — as well as longer visas for selected students and selected professions — would be put implemented by the end of the year.
The move to extend foreign ownership has been welcomed by economists, even as key details have yet to be announced.
“The eligibility and the extensiveness of the investment liberalization will be critical to gauge the support to the economy,” Monica Malik, the chief economist at Abu Dhabi Commercial Bank, told Arab News on Thursday.
“Recent official comments indicated that the area of focus will likely be on factors such as job creation and technology transfer.”
Such a theme is in keeping with the UAE’s move to allow visas for up to 10 years for specialists working in medical, scientific, research and technical sectors, alongside 5-year student visas and 10-year visas for “exceptional” students.
Longer visa terms are predicted to especially impact the local real estate sector, which has languished in recent years thanks to increasing supply and sluggish economic conditions.


Tesla nears 3-month low as JPMorgan adds to private deal doubts

Updated 20 August 2018
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Tesla nears 3-month low as JPMorgan adds to private deal doubts

  • Slashing its price target for Tesla from $308 to $195, the brokerage said it did not believe Chief Executive Officer Elon Musk had funds for a plan
  • Tesla shares fell nearly 4 percent

LONDON: Tesla shares fell nearly 4 percent on Monday as a $113 cut in JPMorgan Chase’s price target for the electric carmaker added to growing doubts among market players about a plan to take the company private.
Slashing its price target for Tesla from $308 to $195, the brokerage said it did not believe Chief Executive Officer Elon Musk had funds for a plan announced by a tweet that said “funding secured” two weeks ago.
Analysts from the US bank had upped its forecast from $198 to $308 after a roughly $100 surge in Tesla stock following Musk’s tweets on Aug. 7 and the note on Monday was the latest evidence of skepticism about the deal on Wall Street.
People familiar with the matter said on Sunday that PIF, the Saudi Arabian sovereign wealth fund that Musk says had been pressing to help fund the buyout, is in talks to invest in aspiring Tesla rival Lucid Motors Inc.
“Our interpretation of subsequent events leads us to believe that funding was not secured for a going private transaction, nor was there any formal proposal,” JPMorgan analyst Ryan Brinkman wrote in a client note.
“Tesla does appear to be exploring a going private transaction, but we now believe that such a process appears much less developed than we had earlier presumed, suggesting formal incorporation into our valuation analysis seems premature at this time,” Brinkman said.
JPM now targets the stock, which it continues to value at underweight, back at $195, versus Friday’s close of $305.50. The median price target of the Wall Street analysts covering Tesla is $336.
Tesla shares touched a three-month low of $285 in premarket trading before recovering to trade around $290, reducing its market value back below that of General Motors as the biggest US carmaker.
An interview with the New York Times, in which Musk said he was under major emotional stress in the “most difficult year” of his life, on Friday added to investors’ concerns over his leadership after a series of social media spats.
A person with direct knowledge of the matter told Reuters last week that the SEC has opened an inquiry related to Musk’s tweets on the buyout and the billionaire is also facing a class action suite from investors who lost money in the share moves.
“The lack of process to (Musk’s) announcement has now caused governance and competency concerns which are starting to snowball,” said Tigress Financial Partners analyst Ivan Feinseth.