ADX surges 2.4% on FAB's foreign ownership limit

Abu Dhabi stocks rallied 2.4 per cent on Sunday, recording a four-and-a-half year high as First Abu Dhabi Bank (FAB) surged after it obtained regulatory approval to increase its foreign ownership limit.

The record upswing was sparked by an announcement by the UAE's largest lender on Thursday that it had received an approval from the central bank and the markets regulator to raise its foreign ownership limit (FOL) to 40 per cent from 25 per cent.

FAB shareholders had approved the increase in FOL at the general assembly meeting in February, and traders had been buying the stock in anticipation of the move.

On Sunday, FAB shares closed at Dh15.58, their highest since May 2014. The index ended at 5,174 points, its highest since September 2014.In the past one year, FAB shares have gained 26 per cent, outperforming the Abu Dhabi index, which has gained 14 per cent. The best performing bank has been Abu Dhabi Commercial Bank with 40 per cent gains in the same time period.

While Dubai shares were flat on weakness in Emaar Properties, which was down 1.2 per cent, other Gulf markets were also weak. The DFM index fell 0.1 per cent to 2,788.

Shares of Emirates NBD rose 1.7 per cent after the bank said it had sold more shares in the London initial public offering of Network International after exercising a greenshoe option.

In regional markets, Saudi stocks made a lacklustre start to the week as financial shares fell on profit-taking after robust gains in the Gulf region's biggest stock market this year. The index ended 0.4 per cent lower, with Al Rajhi Bank down 0.6 per cent and Samba Financial Group down 1.3 per cent.

It is still up almost 16 per cent so far this year, fuelled by an increase in foreign fund flows as it entered the FTSE Russell's emerging market index on March 18.

Across the rest of the Gulf, Bahrain stocks were up 0.5 per cent, while Kuwait's market was flat. Egypt's market was down 0.2 per cent.