DUBAI – Etisalat's Chief Executive Officer Ahmad Abdul Karim Julfar recently said the Emirates Investment Council is currently working on amending a law which will allow foreign ownership of its shares. "Etisalat to allow foreigners to own its shares soon," he said in a report published in Gulf News. The telecommunication company is currently 60 percent owned by the government. Analysts have long cited a change in foreign ownership levels as a potential catalyst for Etisalat shares. The opening up of leading UAE stocks like Etisalat to foreigners would also help improve the country's chances of clinching a much sought after upgrade to emerging market classification by index compiler MSCI Inc. Matthew Reed, a senior analyst at Informa Telecoms and Media in Dubai, said Etisalat management is in favor of opening up its share register to foreigners, a move that would improve liquidity and corporate governance at the telecoms firm, widely considered a UAE bellwether. "However, the UAE government has the final say on the matter, but might be – or perhaps already has been – convinced by those arguments," Reed added. Another Dubai-based telecoms analyst said that while Julfar's comments aren't exactly new, the reiteration could be taken as a signal that the foreign ownership ban could be lifted soon. "It's no longer a matter of if, but rather when," said the analyst, who asked not to be named. Shares of Emirates Telecommunications Corp, rose sharply Sunday on hopes that a ban on foreign ownership of its stock may soon be lifted. Etisalat shares gained 1.4 percent to Dh9.33, outperforming the broader Abu Dhabi Market which ended 0.6 percent higher at 2,485.51. The Abu Dhabi-based company said June 7 it's for the federal government to decide on foreign investments after Emarat Alyoum reported a law that governs Etisalat may be amended to allow foreign and institutional investors to hold the shares. The company's second-quarter profit rose 17 percent to AED1.87 billion ($508 million), beating analysts' estimates. Etisalat comprises 29 percent of Abu Dhabi's index. Six analysts recommend investors buy the shares, while three have a hold rating, according to data compiled by Bloomberg. – Agencies
