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Middle East banks remove burdens for foreign investors to buy shares

Qatar National Bank

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Shares of two of the largest lenders in the Middle East jumped on Monday after they said they planned to increase their shares, which could be owned by foreign investors. Qatar National Bank’s stock rose by 10%, the biggest growth of more than 12 years, while shares of the largest bank in Dubai Emirates NBD reported a 4.5% rise in prices.
Qatar National Bank, the region’s largest asset creditor, urges shareholders to increase non-Qatari ownership to 49% from 25%, while Emirates NBD wants to raise its limit to 20% from 5%.
Middle East banks are seeking to diversify their investment base, given the continued impact of lower oil prices and regional policy. Qatar has been involved in a conflict with Saudi Arabia, the United Arab Emirates, Bahrain and Egypt since June, which has led to a capital flight.
Qatari companies increased limits foreign ownership to attract foreign capital, as the penalties by the four Arab countries led to a significant outflow of about 40 billion USD last year. The company expects a Qatar National Bank to target a passive inflow of up to 730 million USD if the limit is increased.
Qatar National Bank said it is seeking to increase foreign ownership to “encourage more foreign funds to invest in the bank and diversify investors”. The bank denies the measure is related to the conflict. The foreign investors now hold about 7% of QNB.