A focus on blue chips, higher trades, bulk deals and existence of institutions movements were key reasons behind the positive close of the market last week. We believe better oil prices and the month-end also played an active role in supporting market activities. MSM 30 went up by 0.63 per cent on a weekly basis, as also did the Financial Index, which closed up by 1.04 per cent. However, both the Industrial Index and the Services Index went down by 1.5 per cent and 0.34 per cent, respectively. The MSM Shariah Index closed down by -1.11 per cent.
The Oman National Engineering and Investment Co was awarded tenders worth RO 6.1 million. With this, total awarded tenders value this year for the company stood at about RO 54.45 million as per available data, up by 91 per cent, compared with full year 2017 awarded tenders.
In response to a Bloomberg article about Renaissance Services’ plans for a $1.5-billion Topaz Energy IPO next year in London, the company said it has not taken any decision to proceed in any particular direction. The company added that any comment on potential valuation contained in the Bloomberg article is speculative.
In the weekly technical analysis, the MSM 30 Index reversed its trend to upward during the previous week supported by blue ships companies. Currently closing MSM Index above the level of 4,500 points will push the index to reach 4,570 points supported by weekly and daily “RSI”.
We continue to see a good response to the government issuance of development bonds as the recent issue 58 (7-year bond) auction results showed that the total subscription amount stood at RO 232.8 million (1.55x) versus the allotted amount of RO 150 million, thus showing continued trust in the government.
The accepted average yield is 5.49 per cent at a price of RO 101.495. As per our database, the last 7-year development bond (Issue 55) issued in November 2017, offered an average yield of 4.91 per cent at a price of RO 101.995.
Abdullah bin Salim al Salmi, Executive President, CMA, announced that the Mandatory Health Insurance Programme will be implemented in five stages. The CMA, he said, has worked on a clear plan that starts from three points: the progressive implementation of the health insurance system, reducing the cost of insurance coverage and the creation of a unified health insurance document.
As per NCSI as of June 2018, 183,947 Omanis and 1,466,473 expatriates are working in the private sector of Oman. Some proportion of this population are already under the net of insurance, however majority is not, which makes us believe that there is significant potential in this segment.
As per the CMA official, the latest statistics indicate that the number of private health institutions must increase and spread across the Sultanate, as the number of private hospitals in Muscat is only 15 hospitals.
As per CMA report published in June 2018, gross direct premiums of health segment rose by 13 per cent of national companies to RO 115.2 million and by 35 per cent (RO 19.3 million) of foreign insurance companies in Oman in 2017. Overall gross direct premiums of health insurance in Oman in 2017 rose by 16 per cent to RO 134.5 million compared to RO 116 million in 2016.
Recent data published by the National Centre for Statistics and Information (NCSI) showed that the daily average production of 8M’18 went slightly up by 0.2 per cent YoY to 970.2k while the average price per barrel jumped by 30.2 per cent to $66.4.
The average export percentage of the total production stood at 83 per cent in same period, compared with 83.7 per cent during 8M’17. China remains the top importer of the Omani crude with a stake of 79.3 per cent followed by India (9.9 per cent) then Japan (5.8 per cent).
Dubai Financial Market topped the gainers of the week amongst regional indices with weekly gain of 2.22 per cent, while Kuwait Stock Exchange was the only loser closing down by 0.18 per cent.
Regionally, Saudi Arabia and four other Gulf states will enter JP Morgan’s emerging market government bond indexes next year, according to a JP Morgan statement sent to investors. The inclusion of Sovereign and quasi-sovereign debt issuers from Saudi Arabia, Qatar, the United Arab Emirates, Bahrain and Kuwait will leave them representing around 11.2 per cent of JP Morgan’s EMBI Global Diversified and EMBI Global series. The indexes are key performance benchmarks for international investors in emerging market debt, so membership can help a country sell bonds and reduce its borrowing costs.
Their entry will be phased in between January 31 and September 30, 2019. Both conventional bonds and sukuk, or Islamic bonds, will be eligible for inclusion in indexes, but sukuk will need to have a credit rating from at least one of the three major rating agencies to be included.
(Courtesy: U Capital)
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