Drake and Scull International has lifted all restrictions on ownership of its stock by Gulf investors, sending its shares soaring to their highest one-day gain in 12 months.
The Dubai-based engineering and construction firm said that nationals from the GCC are now able to own 100 per cent of its shares, up from its previous level of 49 per cent.
Following the move the company’s shares surged by 11.46 per cent, their highest gain since last July. The shares, the highest gainer on Dubai’s stock market yesterday, closed up at 80.7 fils, their highest close for seven weeks.
“It’s mirroring what we saw with Etisalat, when foreign ownership restrictions were dropped,” said Khaldoun Jaradat, trading manager at Brokerage House Securities in Dubai. “Local investors think other buyers will come in for the first time from outside, so they buy shares to try and make some money when this new money comes in.”
However, the surge in buying comes even though GCC ownership of the company’s shares stands at just 5.85 per cent of its total share capital, according to the Dubai Financial Market, far below the previous ownership threshold of 49 per cent. UAE nationals own just over half of DSI shares, with 30.72 per cent owned by Arab investors.
The company did not respond to requests for comment.
jeverington@thenational.ae
Follow The National's Business section on Twitter
