The MSM30 and the financial market are still under pressure from foreign investors, which can be attributed to factors such as cautious sentiment among investors due to lower oil prices, sovereign rating downgrade, the performance of some sectors and liquidity level. MSM30 closed the week down by 2.5 per cent at 4,336.84. All sub-indices closed down led by the Services Index (-2.21 per cent) followed by both the Financial Index and the Industrial Index (-1.36 per cent). The MSM Shariah Index also closed down by 1.94 per cent w-o-w. In an update to its previous disclosure on the MSM website about its Rights Issue, Bank Dhofar said that it received applications for a total of RO 61.2m against an issue size of RO 55m.
Bank Sohar EGM key resolutions include issuance of Additional Tier 1 Capital Instruments in the form of perpetual bonds up to RO 100m with nominal value of RO 1000/bond by way of Private Placement after obtaining all required regulatory approvals. As at 9M’18, the bank has a Tier 1 ratio of 14.04 per cent down from 14.64 per cent at the end of 9M’17. The bank’s total capital adequacy ratio stood at 15.6 per cent as at the end of 9M’18.
Shell Oman Marketing Company SAOG has signed an agreement with Port of Duqm Company SAOC (PDC) to develop fuel bunkering facilities and services. The agreement establishes bunkering terminal to provide different grades of quality fuels and lubricants as well as other ancillary facilities to marine liners calling at Port of Duqm. The company net profit for 9M’18 was down by 16.7 per cent.
Oman International Development and Investment Co (Ominvest), one of the largest investment companies in the Middle East, opened its state-of-the-art Ominvest Business Centre (OBC) which is considered an urban landmark capable of providing an attractive business environment and contributing to support the economy of the Sultanate.
In the weekly technical analysis, as we mentioned in our last recommendation that the MSM30 index will reach the level of 4,440 points (support level), which happened, currently the technical indicators shows that closing MSM30 index below 4,330 points will pressure to reach the level of 4,280 points. MSM 30 index crossed down the 10-day moving average (negative indicator).
Data related to foreign investments by sector showed higher ownership in the Industrial Sector on yearly basis in 11M’18. Data, which was released by the MSM, indicated an ownership percentage of 10.78 per cent in the industrial sector during 11M’18 versus 9.94 per cent for the same period last year. On the other hand, both the Financial and the Services sectors registered lower foreign ownerships during the same comparable periods by 199.7 and 97.7 basis points respectively.
The new list of Shariah compliant companies as per 3Q’18 which was published by the MSM indicates the entry of Assafa Foods and Oman Chromite and the exit of Gulf International Chemicals and Oman Fisheries.
We continue to see a good response to the government issuance of development bonds as the recent issue 59 (5 year bond) auction results showed that the total subscription amount stood at RO 155.7m (1.56x) versus the allotted amount of RO 100m, thus showing continued trust in the government. The accepted average yield is 4.91 per cent at a price of RO 100.395. As per our database, the last 5 year development bond (Issue 57) issued in June 2018, offered an average yield of 4.85 per cent at a price of RO 99.56.
All GCC financial markets ended the week down led by Dubai Financial Market (-3.43 per cent). The Kuwaiti Ministry of Commerce and Industry has issued a decision allowing foreign investors to own and trade in Kuwaiti banks’ shares. However, the approval of the Central Bank of Kuwait (CBK) should be obtained, if ownership exceeds five percent of the bank’s capital. The step follows the Capital Markets Authority recommendation in order to attract more foreign investments, as data show that these investments constitute only 15 per cent of the base of investors in the Kuwait Stock Exchange as a whole.
[Courtesy: U-Capital]
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