Shares in Etisalat rose sharply yesterday after the telecommunications company confirmed it was in talks with the Government about lifting a ban on foreign ownership of its stock.
The Abu-Dhabi listed group said foreign ownership would boost competition in the sector as shares in the company rose 1.41 per cent to close at Dh9.35.
"Etisalat Group is currently in discussion with the United Arab Emirates Government with regards to foreign ownership and trading," Ahmad Abdulkarim Julfar, the group chief executive of Etisalat said.
The company declined to give any indication of when it believed the talks with the Government would reach a conclusion but Mr Julfar told Al Khaleej newspaper he expected the foreign ownership ban to be lifted "soon".
According to the Abu Dhabi Securities Exchange, foreign ownership is not currently permitted in 15 other listed companies, including the Abu Dhabi energy company Taqa, National Bank of Fujairah and Arkan Building Materials.
Etisalat, which is 60 per cent owned by the federal Government, believes there are advantages to foreign ownership. Mr Julfar said the company had provided "recommendations to the Government and the Emirates Investment Authority" on the matter.
"Etisalat believes opening the door for foreign ownership provides a more competitive business environment and allows for the further development of the telecommunications sector," he said.
Matthew Reed, a senior analyst at Informa Telecoms & Media in Dubai, said Etisalat was in favour of foreign ownership because the company believed it would improve liquidity and corporate governance.
"The UAE Government has the final say on the matter but might be - or perhaps already has been - convinced by those arguments," he said.
Other analysts cast doubt over how foreign ownership could improve competition among companies such as Etisalat.
"I think allowing foreign ownership of Emirati stocks is a step in the right direction in order to level the playing field for all investors but I'm failing to see how it will promote 'a more competitive business environment'," said Petr Molik, the head of the research division at Mena Corp.
He said dropping the ban on outside investors would be likely to boost trading volume and, possibly, the price of Etisalat's stock.
But foreign investors would be unlikely to have much sway on the company's decisions, he added. Mr Molik said that meant the Government was likely to keep its stake in the company.
"I do not see any near-term possibility for the state to sell a minority stake in Etisalat to a foreign telecom," he said. "That would help with group restructuring and then better competing with du on the local market."
Ibrahim Masood, a senior investment officer for asset management at Mashreq, said relaxing laws on foreign ownership could help the UAE's case in being upgraded to MSCI emerging market status.
"Restrictions on foreign ownership always tend to be a sticking point for offshore institutional investors and any moves to relax these are generally seen as being investor friendly steps," said Mr Masood.
Etisalat on Wednesday reported a turnaround in its financial performance having posted a net profit of Dh1.9 billion (US$517.2 million) in the second quarter after months of decline. The company said its net profit had risen by 17 per cent with revenues up 4 per cent to reach Dh8.25bn in the second quarter of this year.
bflanagan@thenational.ae
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
IF YOU GO
The flights: FlyDubai offers direct flights to Catania Airport from Dubai International Terminal 2 daily with return fares starting from Dh1,895.
The details: Access to the 2,900-metre elevation point at Mount Etna by cable car and 4x4 transport vehicle cost around €57.50 (Dh248) per adult. Entry into Teatro Greco costs €10 (Dh43). For more go to www.visitsicily.info
Where to stay: Hilton Giardini Naxos offers beachfront access and accessible to Taormina and Mount Etna. Rooms start from around €130 (Dh561) per night, including taxes.
Step by step
2070km to run
38 days
273,600 calories consumed
28kg of fruit
40kg of vegetables
45 pairs of running shoes
1 yoga matt
1 oxygen chamber
STAY%2C%20DAUGHTER
%3Cp%3E%3Cstrong%3EAuthor%3A%20%3C%2Fstrong%3EYasmin%20Azad%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPublisher%3A%20%3C%2Fstrong%3ESwift%20Press%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAvailable%3A%20%3C%2Fstrong%3ENow%3C%2Fp%3E%0A
The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
'Gehraiyaan'
Director:Shakun Batra
Stars:Deepika Padukone, Siddhant Chaturvedi, Ananya Panday, Dhairya Karwa
Rating: 4/5
Cry Macho
Director: Clint Eastwood
Stars: Clint Eastwood, Dwight Yoakam
Rating:**
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Fanney Khan
Producer: T-Series, Anil Kapoor Productions, ROMP, Prerna Arora
Director: Atul Manjrekar
Cast: Anil Kapoor, Aishwarya Rai, Rajkummar Rao, Pihu Sand
Rating: 2/5
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
