(Bloomberg) -- Stocks in the U.A.E., especially in the real-estate industry, may get a boost from plans to allow full foreign ownership in companies as the government seeks to attract investment.

Allowing non Emirati nationals to own 100 percent of businesses and granting long-term visas to some investors could support property companies such as Emaar Properties PJSC, analysts, strategists and investors said. The decision could trigger a return by investors to Dubai equities, whose index entered a bear market earlier this month amid faltering prospects for the real-estate industry, one of the main pillars of the economy.

The DFM General Index was up 1 percent as of 11:33 a.m. local time, trimming its loss this year to 13 percent. Emaar Properties added the most to the increase, and was set for the biggest gain in a month. Dubai’s gauge is trading near the cheapest level to the MSCI Emerging Markets Index since 2011 when comparing estimated price-to-earnings ratios for the coming year. In Abu Dhabi, the ADX General Index climbed 0.6 percent, extending its gain in 2018 to 1.2 percent.

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Here are some of the views of analysts, strategists and investors on the changes:

EFG-Hermes, Mohamad Al Hajj

  • While more details are needed, “the news could provide the catalyst needed to lift the U.A.E.’s real estate market and improve sentiment towards U.A.E. equities”
  • Could help raise U.A.E. valuations, particularly in Dubai, back to historical averages at least, especially given that the market, with the exception of First Abu Dhabi Bank PJCS and Emirates NBD PJSC among the “blue chips,” hasn’t performed well over the past year
  • Has Emaar Properties, Emaar Development PJSC and Aldar Properties PJSC “on our watch list” Monday

Abu Dhabi Commercial bank, Monica Malik

  • Sees developments as positive, with “clear shift in policy to supporting economic activity, boosting investment and putting in place a framework for future development”
  • Impact could reach “multiple areas of support for the economy,” raising investment levels, population inflows, development of new sectors “especially on the technology front”, and reducing remittances out of the country
  • Malik looks forward to details including “list of sectors eligible for the 10-year visa, the type of companies that will be granted 100 percent ownership”

Mitsubishi UFJ Financial Group, Ehsan Khoman

  • “This eagerly awaited amendment to foreign ownership laws will not only change the investment landscape of the U.A.E., but also create significant growth prospects by attracting more FDI flows, primarily into the non-oil sectors of the economy”
  • “This will further add to the U.A.E.’s robust business operating environment, first-rate infrastructure and well-diversified economy, which will continue to position the country as one of the most preferred investment locations in the world”

Arqaam Capital, Jaap Meijer

  • Allowing 100 percent ownership by foreigners “will help spur FDIs outside the existing free zones. With zero income tax and corporate tax and a pro-business visionary government, the U.A.E. remains a very attractive option for international businesses.”
  • Five-year visas for students “could spur the further develop the academic curriculum of the country, particularly the higher education”
  • “The decision should also help net immigration, which should significantly alleviate the current pressure on housing markets;” longer-term visas could provide “more certainty for some of its expatriate residents”

Shuaa Capital, Aarthi Chandrasekaran

  • “We need to wait and see how the investors’ visa will unfold in terms of eligibility,” but appears to be timely and welcome decision. Could provide “catalyst that could uplift sentiment in the near term”
  • While 100 percent foreign ownership limit is a possibility, it’s “too early to jump the gun,” given potential for exclusions. “More importantly, U.A.E. has many listed securities that are completely closed to foreigners and more than half of the market is still below 49 percent foreign ownership limit.”
  • “So there is more to do, before we can talk or think along the lines of 100 percent FOL for listed equities, in our view.”

--With assistance from Matthew Martin.

To contact the reporters on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net;Archana Narayanan in Dubai at anarayanan16@bloomberg.net;Mahmoud Habboush in Abu Dhabi at mhabboush@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, John Viljoen

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