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Abu Dhabi Shares Rise on Speculation MSCI Will Name U.A.E. Emerging Market

Abu Dhabi’s shares advanced to a one-week high after an increase of foreign ownership limit at First Gulf Bank PJSC (FGB) boosted optimism the United Arab Emirates may be upgraded to emerging market status at MSCI Inc. (MSCI)

First Gulf Bank, the U.A.E. lender controlled by Abu Dhabi’s ruling family, jumped 2.7 percent. National Bank of Abu Dhabi PJSC (NBAD), the second-biggest bank in the U.A.E., gained to a two-week high. Abu Dhabi’s ADX General Index (ADSMI) rose 0.4 percent to 2,444.86, the highest since Nov. 21, at the 2 p.m. close in the emirate, trimming the drop for the month to 2.3 percent. The DFM General Index (DFMGI) increased 0.6 percent and the Bloomberg GCC 200 Index (BGCC200) slipped less than 0.1 percent.

“The increase in foreign ownership caps at First Gulf shows that some MSCI requirements for upgrade are being implemented, improving optimism” that the market could be raised to emerging market status, said Waleed Al Khateeb, senior finance manager at Dubai-based Daman Securities LLC. “Poor liquidity remains an issue.”

The U.A.E. and Qatar may be raised to emerging market status at MSCI next month after the index provider delayed the decision in June. MSCI cited “stringent foreign ownership limits” such as limited availability of shares to foreign investors as a concern. About $3 trillion of funds are benchmarked against MSCI’s indexes globally.

Under existing U.A.E. law, companies are limited to a maximum 49 percent foreign ownership except in free zones.

First Gulf yesterday raised its foreign ownership limit to 25 percent from 15 percent. The shares advanced the most since Nov. 13, rising to 15.15 dirhams.

National Bank of Abu Dhabi gained 1.4 percent to 10.6 dirhams, the highest since Nov. 14.

About 61 million shares traded in Abu Dhabi today, compared with a 12-month daily average of 64 million shares.

Kuwait’s measure (KWSEIDX) advanced 0.2 percent and Bahrain’s gauge (BHSEASI) gained 0.7 percent. Qatar’s QE Index (DSM) and Saudi Arabia’s Tadawul All Share Index (SASEIDX) decreased 0.1 percent. Oman’s MSM30 Index (MSM30) declined 0.2 percent.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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