Qatar's Aamal offers shares as global depository receipts and requests to open up foreign ownership limits to 50 per cent. Foreign ownership limits are among the requirements made by MSCI to upgrade the country to emerging markets status.
Aamal share offering shows emerging will
The move by Aamal to offer foreign investors shares shows how serious Qatari companies and the government are about achieving "emerging market" classification from the index bench-marker MSCI. Aamal makes industrial materials including electric cables and also has trading and property businesses.
The billionaire Qatari investor Sheikh Faisal bin Qassim Al Thani will offer up to 118.8 million of his shares, or 24 per cent of the company's share capital, in the form of global depository receipts on the London Stock Exchange. The company has a current float of 0.3 per cent. The offer will "further enhance the liquidity and profile of the company's shares among international institutional investors seeking high-quality exposure to Qatar's rapid economic growth", Aamal said in a statement to the Qatar Exchange. Citigroup and HSBC Holdings are joint global co-ordinators and book runners, and Arab African International Bank is co-lead manager.
Among the requirements for Qatar, and the UAE, to graduate from frontier status, is that their companies need to increase foreign ownership limits. MSCI is expected to announce the results of its annual market classification review on June 21. Aamal's announcement sent its stock to a four-month high, up 10 per cent to 20.13 rials a share, its highest since January 14.
Aamal also applied to the Qatari government to lift its foreign ownership level to 49 per cent, and is waiting for approval. Qatar restricts foreigners from owning more than 25 per cent of a company's shares, but recently more companies have been seeking exemptions as they try to improve liquidity.
Qatar could attract at least US$2 billion in new foreign investment if upgraded to emerging markets status, according to BNY Mellon.
The country has been rebuffed twice by MSCI, which cited failures to raise foreign ownership limits and switch to a new settlement system. With the introduction of the "delivery versus payment" system and the relaxation of foreign ownership limits, the country may well have a chance this time.