Thursday, March 28, 2024 | Ramadan 17, 1445 H
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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Market declines despite good set of results

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Despite relatively good performance by a number of leading companies and banking sector organisations, the market declined during the week, largely due to GCC institutional selling. Trading remained below the required level as investors ignored the strengthened macro and micro factors, attractive multiples and good corporate profitability numbers.


MSM30 closed the week down by 1.71 per cent at 4,236.75. All sub-indices ended down lead by the Services Index (-2.55 per cent) then the Financial Index (-1.34 per cent) then the Industrial Index (-0.38 per cent). The MSM Shariah Index also closed down by 0.36 per cent w-o-w.


The Telecommunications Regulatory Authority (TRA) has informed Omantel and Ooredoo Oman that it has finalised all the procedures relating to the renewal of the First Class mobile telecom licenses of these companies. According to the disclosures, the renewal will be for a period of 15 years commencing in February 2019 for Omantel and February 2020 for Ooredoo Oman. The TRA will get one-time fees of RO 75m from each telecom operator. The fees will be paid in two equal instalments as follow: Omantel (2019 and 2020) and Ooredoo Oman (2020 and 2021). It is key to mention that this renewal does not include the 5G spectrum.


Galfar Engineering and Contracting Co was awarded a contract worth RO 26.95m related to construction of water networks in Al Dakhiliyah governorate. This results in total contracts of RO 29.46m YTD. The company posted a net profit of RO 2.9m for 2018 compared with net loss of RO 5.8m for 2017.


Oman Oil Marketing Co announced that it will invest in Tanzania focusing on fuel retail and SFS market. The company said that Tanzanian market is promising and there will be growth in vehicle numbers.


Al Jazeera Services’ board of directors has decided to reduce the book value of an investment in associate company. This results in creating an impairment of RO 4.4m to the profit or loss statement for 2018.


Total announced 2018 initial net earnings so far (except Omantel), as per MSM, for the companies whose fiscal year ends in December showed an increase of 23.8 per cent YoY (i.e. RO 114.3m) at RO 594.1m boosted by the performance of banks, a reduction in Al Hassan Engineering net loss, and better performance of Ooredoo Oman and Renaissance Services.


Sector wise, key sectors did well. The service sector posted highest addition with RO 57.2m mainly on Renaissance Services posting profits instead of loss, better performance by Ooredoo Oman and despite pressures from ACWA Power Barka SAOG. The Industrial sector added RO 35m on lower loss by Al Hassan Engineering and better results of Galfar. The Financial sector was mainly backed by banks who posted addition RO 39.2m in net earnings. On a quarterly basis, 4Q’18 total net earnings stood at RO 120m, notably up by 117.8 per cent on yearly basis.


Oman banks posted their initial results for FY18. A comparison reveals that growth wise, Bank Nizwa led the field with a 98.4 per cent YoY growth in its net profit, followed by HSBC Oman at 64.4 per cent YoY, Bank Sohar at 15.9 per cent YoY, NBO at 15.0 per cent YoY, Bank Dhofar at 5.6 per cent YoY and Bank Muscat at 1.6 per cent YoY.


Bank Muscat’s net profit forms the largest share of the sector net profit at 47 per cent, followed by BankDhofar and NBO at 13 per cent each, Bank Sohar, Ahli Bank and HSBC Oman at 8 per cent each, Bank Nizwa at 2 per cent and Alizz Islamic Bank at 1 per cent. The total sector net profit stood at RO 379.6m, up by 11.5 per cent YoY. The sector’s net loans have grown by 7.2 per cent YoY to reach RO 21.7 bn and total deposits have reached RO 20.0 bn up by 5.7 per cent YoY. Loan-to-deposit ratio rose to 108 per cent in FY18 from 107 per cent in FY17.


The CEO of Nama Holding said that current year will witness privatisation of two companies out of five transmission and distribution companies. These are Muscat Electricity Distribution company and Oman Electricity Transmission company. The CEO added that since the restructuring of the electricity generation sector in 2005 until the end of 2017, foreign investments have exceeded RO 2.7 bn.


[Courtesy: U-Capital]



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