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Etisalat and du to invite over more foreign ownersMENA

Etisalat and du to invite over more foreign owners

The United Arab Emirates’ two telecom operators, Etisalat (ETISALAT)  and du (DU), are reportedly planning to raise the foreign ownership limits of their stocks. They are not the only publically listed companies in the region to do so recently, though. Other companies, including First Abu Dhabi Bank and Abu Dhabi National Energy Co, have also raised foreign ownership limits recently.

Both companies opened up for foreign ownership back in 2015 with a 20% cap. However, foreign ownership remained quite low – for instance, less than 1% of du shares belong to foreign investors right now. Following the news, their shares were up by as much as 15% in Tuesday’s opening session on DFM and ADX.

Etisalat and du’s stocks performed strongly last year as they benefited from the remote-working trend (I’m sure you too were forced to upgrade your home internet bandwidth to avoid lags caused by the overload of Zoom, Fornite, and Netflix multitasking!). We can expect share prices to jump even higher once Etisalat and du reveal their full-year 2020 results.

why it matters
It is clear that the UAE is making efforts to attract overseas investment as a way to help the local economy recover from the effects of the coronavirus pandemic and the slump in oil prices. Another indication of this strategy was their decision, back in November 2020, to allow foreigners to own 100% of their businesses in order to make the regional economy more competitive.