The United Arab Emirates and Qatar may become the first Persian Gulf countries to allow short- selling as regulators seek to revive trading volumes and secure MSCI Inc.’s Emerging Markets status.
The implementation of short-selling is “in line with the efforts to upgrade the U.A.E. markets,” the country’s regulator said in an e-mailed response to questions. Qatar’s exchange has also signaled it will introduce short-selling and derivatives trading, in addition to raising the percentage of shares foreigners can own in a company to 49 percent from 25 percent.
“As these markets join the MSCI EM, more attention will be focused on them,” volumes will probably rise and the market will likely become more efficient, said Philippe Langham, who runs the $660 million Royal Bank of Canada Emerging Markets Fund in London. Langham doesn’t hold investments in the U.A.E. or Qatar and would consider buying stocks after an upgrade. “We would spend more time looking for attractive opportunities in any markets that look set for promotion.”
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