First Gulf cuts limit on foreign stock ownership

5 January 2009

Abu Dhabi's First Gulf Bank (FGB) has halved its limit on foreign share ownership in a bid to halt the speculation that it holds responsible for driving down its stock price.

Arabian Business reports that foreign investors will now be limited to a 15 per cent holding in the institution, down from 30 per cent.

FGB chairman Sheikh Hazza bin Zayed Al-Nahyan told the site that the move was necessary in order to curb risk after "irrationally traded" shares led to the bank's price falling by more than half over the past few months.

"The decrease in the share price was in majority attributed to short term foreign speculators who took advantage of markets' nervousness," he commented.

The bank said the move to cap foreign stock ownership was confirmed at a board meeting on Sunday (December 28th).

FGB was established in 1979. With shareholder equity of around ten billion dirham ($2.7 billion), it is one of the biggest equity-based financial institutions operating in the United Arab Emirates.

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