Abu Dhabi — The landmark decision of allowing foreigners to own shares in Emirates Telecommunication Corporation will not be enforced with immediate effect, the company known as etsialat said in a regulatory filing.
The telecom operator said the implementation of the decision regarding the lifting of restriction on share holding will not be possible without completing “additional legal and legislative procedures”.
Therefore, it will not be in forced with immediate effect.
“Competent authorities are working on the same,” the firm said in a statement to the Abu Dhabi Securities Exchange.
Etisalat said on Monday that the federal government has decided to allow foreign investors to own up 20 per cent of its shares. The government owns 60 per cent shares in etisalat through the Emirates Investment Authority, which made it clear that it has no intention to reduce its shareholding in the company. The investor community has welcomed the decision, which will allow foreign investment in the blue-chip company known for strong payouts.
The telecom’s share price rose 15 per cent to Dh13.80 on Tuesday; a total of 25.652 million shares changed hands. The ADX’s general share price index gained 134.89 points to close at 4,775 points.
At current prices, the share is a good buy for investors who want to keep them for long, said Jamal Ajaj, director-general at Al Sharhan Share Brokerage.
There has been a demand from foreign buyers in telecom shares, particularly in etisalat, for its history of paying handsome dividends. However, there is little liquidity in the share, as UAE nationals who own 40 per cent keep it to earn cash dividends.
“If share price continues to grow, as it did on Tuesday,” he said. “There’s every likelihood that some investors will liquidate their holdings which can be grabbed by foreigners .”
The UAE joined MSCI’s Emerging Markets index at the end of May 2014, although etisalat was not included by the index provider despite its size.
The broker thought at Dh13.80 a share, etisalat is a good long-term investment.
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