First Gulf Bank ups foreign ownership limits

First Gulf Bank has voted to increase the limits on international investors' ownership to 25 per cent of its shares.

The bank, the UAE's second biggest by market capitalisation, said it had voted to increase the limit yesterday just hours before MSCI, the index provider, was set to release the results of its review of the UAE's markets. An upgrade to "emerging market" status typically results in an increase in international investors buying a company's stocks.

Low levels of ownership by international investors have been a sticking point in the past for the UAE's upgrade to emerging market status, and increasing these limits was one of several criteria set out by MSCI in its review of the country's markets.

"The bank is currently looking to diversify its investor base," said Abdulhamid Saeed, the managing director of First Gulf Bank (FGB).

"The decision to increase the limit of foreign ownership is a natural progression in light of our year-on-year growth.

"It is also based on the development and maturity of the UAE banking sector and the increased opportunities that the UAE market offers to foreign investors."

FGB cut its foreign ownership limit from 30 per cent to 15 per cent in December 2008, at the onset of the financial crisis.

The UAE limits international investors to holding no more than 49 per cent of a company's stock, although full ownership is allowed in the UAE's free zones.

Many of the UAE's large-cap companies, such as Etisalat and Abu Dhabi Islamic Bank, are off-limits to anyone but Emiratis.

At the start of the global financial downturn, a number of companies reduced international ownership limits. Alongside FGB, Sorouh reduced its ownership limit from 20 per cent to 15 per cent.

ghunter@thenational.ae