Shares in Dubai's express courier Aramex have surged this year on hopes that changes in foreign ownership laws in United Arab Emirates companies could tempt a takeover bid by larger rivals such as Fedex Corp, UPS or TNT, reported Reuters.
    Aramex's shares were at 2.23 dirhams on Monday, just under a 27-month high. It has gained more than 50 percent this year.
The UAE's Federal National Council, an government advisory body, is expected to debate the law decide to raise foreign ownership limits of some companies from the current 49 percent.
    "Oil and gas companies and banks are likely to stick with the current foreign ownership restrictions, but transport, healthcare, education, construction, real estate and all other sectors in which the government would welcome foreign investment are likely to have their limits raised," said Zahed Chowdhury of Al Mal Capital.
    New caps will be set on a sector-by-sector basis, the Securities and Commodities Authority said.
    Aramex offers international and domestic express delivery, freight forwarding, logistics and warehousing, documents managements and online shopping services.
    Ahead of the likely changes, some investors have bet on foreign firms taking control of select listed UAE firms, with Aramex seen as a prime target for global rivals such as TNT, Fedex or UPS.
    Consolidation within the express courier sector has been long expected, with Dutch TNT seen as a potential target for its US rivals.
    "There are rumours referring to some old media reports that TNT may be interested in acquiring Aramex," said Julian Bruce, director of institutional equity sales at EFM-Hermes. "The stock is solely driven by local investors who are speculating on this possibility."
    Aramex is at its foreign ownership limit. UAE investors own 42.3 percent of Aramex, with nine percent held by investors from other Gulf countries, 14.1 percent by other Arabs and 34.5 percent by foreigners, according to Dubai bourse data.

Source: Cargonews Asia