First Abu Dhabi Bank proposes removing foreign ownership cap

Dubai, UAE. Photo by David Rodrigo on Unsplash

First Abu Dhabi Bank PJSC proposed removing a cap on the foreign ownership limit in its sharers after the United Arab Emirates started loosening rules to attract international investors.

The board’s proposal is subject to the supervision of regulatory authorities and would require amendments to the current laws and policies, the nation’s biggest bank said in a statement. The move has “the potential that other public companies in the U.A.E. may apply similar measures,” it said.

This “is positive news for U.A.E banks as it may allow international banks to take strategic stakes in local lenders, especially for the mid to small sized lenders that are underperforming,” Edmond Christou, a financials analyst with Bloomberg Intelligence, said by email. “This is likely to bring new skills, speed up digital transformation with knowledge sharing and international investments.”

The U.A.E. said this month it’ll allow foreigners to own 100% of businesses across industries. The federal government will leave it to individual emirates to “decide the ownership percentage in each activity according to their circumstances,” said Prime Minister Sheikh Mohammed Bin Rashid Al Maktoum.

The U.A.E., the second-biggest Arab economy, currently caps foreign ownership of businesses at 49%, except in so-called economic free zones. First Abu Dhabi Bank’s shareholders in February approved raising its foreign ownership limit to 40% from 25%.

First Abu Dhabi Bank’s proposal comes after the market regulator in neighboring Saudi Arabia removed the limit of ownership of publicly traded companies for foreign strategic investors. While the Saudi market watchdog has removed the cap, limits by other regulators or a company’s own rules still apply.

First Abu Dhabi Bank in May asked MSCI Inc. to clarify its decision not to increase the lender’s weighting on its MSCI EM index. The index compiler’s CEO said in an interview in March that a strategic stake controlled by Abu Dhabi’s royal family was an obstacle for higher weighting.

FAB shares closed unchanged on Wednesday. They’ve risen 6.4% so far this year, compared with a 3.4% gain in the exchange’s benchmark index.

Bloomberg 

 

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.