Geopolitical tensions weighed on performance of MSM

Geopolitical tensions at the end of last week weighed on the performance of regional and local markets. Volumes and values were higher on the MSM as the market was open only for two days last week.

The MSM30 Index ended the week down by 0.59 per cent at 3,918.49. All sub-indices closed down except Industrial which was up 1.11 per cent. The Financial Index closed down by 0.88 per cent while Services Index closed down by 0.95 per cent. The MSM Shariah Index closed up by 0.90 per cent w-o-w.

The Capital Market Authority (CMA) announced last week that an appeal filed by Sohar Power Company (SPC) against its ruling has been dismissed by the Appellate Division of the Administrative Court. Delivering its final judgement against Sohar Power Company, the appellate bench stated: “Admitting the company’s appeal as a matter of form and substantively dismissing it, uphold the appealed judgment and obligate the company to pay the expenses.”

Bank Dhofar sought approval for its Tier-1 Perpetual Bond worth RO 115.5m ($300m) at some time over the next five years to be listed and traded on Euronext Dublin or MSM through public subscription or private placement.

The Supreme Council for Planning last week reviewed preparations for the Tenth Five-Year Plan (2021-2025), and the first implementation plan for the future Vision Oman 2040. The SCP also reviewed the operational aspects of various sectors of the Ninth Plan (2016-20), major strategic and development projects, and ways to address the challenges being faced by some of these projects, and funding alternatives in the coming period.

Oman, in line with its commitment to align itself with international best practices in tackling cross-border tax evasion and meeting the standards set by the European Union (EU) and the Organisation for Economic Co-operation and Development (OECD), is currently in the process of issuing regulations for automatic exchange of information (AEOI) through Common Reporting Standard (CRS). In order to meet the deadline for the Automatic Exchange of Information (AEOI) global standard by 2020, banks and other financial institutions have already been mandated by the Central Bank of Oman to ensure collection of CRS related information for new account holders effective from July 1, 2019. It is expected that the existing account holders will also be required to provide the necessary information on tax residency in the later part of 2019.

As per latest National Centre for Statistics and Information monthly bulletin, the local production and import of natural gas reached 14.56 bn cm in 4M’19, a yearly increase of 2 per cent. The usage rate was 100 per cent with the industrial projects stood at 64.8 per cent of the total consumption versus followed by Oil Fields (20.6 per cent), then Power generations (14.1 per cent), the Industries Area (0.4 per cent) and the Ministry of Defence (0.1 per cent). Over 2013-18, CAGR stood at 3.17 per cent.

The number of expats in the Sultanate has dropped below 2 million for the first time in two years. According to the National Centre for Statistics and Information, as of, June 9, there were 2.65m Omanis and 1.997m expats, which means expats account for 43 per cent of the country’s total population. That’s the lowest expat population percentage has been since April 2016.

Among GCC markets, Saudi Stock Exchange topped the gainers while Abu Dhabi declined the most by 0.80 per cent followed by MSM at 0.59 per cent.

GCC Telecom sector profitability was up 7.7 per cent YoY but was down 6.6 per cent QoQ to $1.95bn in 1Q19. Abu Dhabi and Bahrain reported higher earnings on both QoQ and YoY basis. While Qatar reported lower earnings on both QoQ and YoY basis. Telecom index of Oman has declined the most amongst the GCC largely because of the recent announcement of third operator to be operational by mid-2020. Earnings of Saudi Arabia and Qatar accounted for nearly 70 per cent of the total.

British Petroleum in its benchmark 2019 Statistical Review of World Energy, raised estimates for Saudi Arabia’s crude oil reserves by 12 per cent, marking the first major change to the country’s estimated reserves since 1989. BP recalibrated some Saudi gas reserves as oil, allowing the Kingdom to close in on Venezuela’s top spot as the world’s largest reserves holder. BP announced that Saudi Arabia’s proved oil reserves were revised to 297.7bn barrels at the end of 2018 from 266.2bn a year earlier, only slightly behind 303bn in Venezuela. Canada was third with 168bn barrels, followed by Iran with 156bn and Iraq with 147bn.

The US kicked off the process before they can impose tariffs on a new set of Chinese imports. The US President said recently that they had still not decided whether they would slap tariffs on an additional $300bn worth of Chinese goods, this sets the legal process in motion. The Office of the US Trade Representative formally began that process with a proposal last week.

The US outlines a potential duty of up to 25 per cent tariffs on China for goods with an annual trade value of roughly $300 billion. The committee will hold a public hearing on June 17 followed by another week for comments, meaning the earliest possible action for tariffs would be June 24. [Courtesy: U-Capital]