ABU DHABI - Local investors have gone on a buying spree to stock up on shares in UAE telecom giant Etisalat after the government decided to open it up to foreigners, an analyst said Wednesday.
The government owns 60 per cent of Etisalat, the Arab world's second-largest telecom firm, and wants to keep that stake, while the remaining 40 per cent is owned by local investors.
Etisalat said Monday the federal government had decided to allow foreign investors to buy 20 per cent of the company's shares.
In reaction, the share price rose the maximum allowable 15 per cent Tuesday, hitting the mark again Wednesday, before profit-taking pared the daily gain to 5.07 per cent.
The 14.50 dirham closing price was the highest in almost 10 years.
As many as 13.77 million Etisalat shares changed hands -- the largest volume in almost two years -- valued at $58 million (51.8 billion euros).
"It is clear that local investors are buying heavily in preparation for when the company is opened to foreign investors," said Sebastien Henin, head of asset management at Abu Dhabi-based The National Investor.
"Another reason is that Etisalat stocks have been trading for a long time well below their fair value," Henin told AFP.
The brisk trading on heavily weighted Etisalat helped push the Abu Dhabi Securities Exchange index up 1.4 per cent Wednesday to 4,821.52 points.
Etisalat serves 145 million customers in 15 countries.