The market recovered after remaining under pressure in last couple of weeks. Trading was thin during the week, however, stocks which gave disclosures benefitting the company in the coming period were most sought by investors. The MSM30 index crossed the 5,000 mark, and ended the week up by 0.80 per cent at 5,011.79.
All sub-indices ended the week with a positive performance led by the Financial Index, which closed the week up by 0.82 per cent, followed by the Services Index at 0.40 per cent, industrial Index at 0.30 per cent and Shariah Index at 0.27 per cent.
In the weekly technical analysis, as per our previous report on the positive reading of the technical indicators as we mentioned that the index will start upward trend above the level of support 4,970 points (this level we mentioned in our previous report). Close the index above the level of 5,000 points during the current period will qualified it to reach the level of 5,026 points as a first level of resistance and then the next level of 5,040 points as a second resistance level.
Till date, the total proposed cash dividend for the year 2017 is RO 381million, down by 2.9 per cent YoY. The financial sector contributes 50 per cent to the total proposed amount, followed by services at 40 per cent and Industrial sector at 10 per cent. The total market proposed cash payout stands at 63.8 per cent of total earnings of 2017 for the companies that have proposed cash with yield of 4.9 per cent. The industrial sector’s cash payout tops with 166.1 per cent of earnings proposed to be paid out as cash, followed by the Services sector at 92.2 per cent and Financial sector at 46.4 per cent. The services sector leads in dividend yield on proposed dividends at 5.2 per cent, followed by the Financial Sector at 4.9 per cent and Services at 3.8 per cent. The total stock dividend proposed for 2017 on MSM stands at RO 69.5 million, higher by 31 per cent YoY. The total market payout on proposed cash as well as stock dividend is 75 per cent as compared to 61.1 per cent in 2016.
Locally, last week, the Central Bank of Oman (CBO) announced a new issue of government development bond (issue 56) which is the first in this year. The size is RO 150 million with a maturity period of ten years and will carry a coupon rate of 6 per cent per annum. As per Oman News Agency, the issue will be open for subscription from March 7 to 15, 2018, while the auction will be held on March 18. The issue settlement date will be on March 21 and the maturity date on March 21, 2028. Available data showed that latest government development bonds with maturity of ten years was issued in September last year (issue 54) and carried a coupon rate of 5.75 per cent and an average accepted yield of 5.44 per cent. The issue was covered 1.74 times.
Qatar exchange closed the week down the most by 4.03 per cent while Bahrain bourse rose the most by 1.60 per cent. Dubai and Saudi bourse dropped during the week by 2.36 per cent and 1.52 per cent respectively.
In a bid to draw more foreign investment into the kingdom and raise the country’s economic competitiveness, Saudi Arabia extended the licensing period for foreign investors to five years — up from one year at present. Saudi Arabia’s General Investment Authority (SAGIA) has undertaken several steps to ease investment processes in the kingdom, including launching a digital licensing facility. The kingdom also introduced a broad set of reforms to its capital markets and a major reform of the kingdom’s legal system is also under way. Saudi is working on a new mortgage pledge law, a franchising law, and the bankruptcy law which was approved couple of weeks before.
As per the Saudi CMA, the total asset base of mutual funds based in Saudi Arabia rose by 15 per cent YoY to SAR 248.2 billion in 2017. The increase was mainly driven by a 22 per cent rise in the assets held by public investment funds throughout the year. Assets held by private funds rose 10 per cent. Analysis of funds by asset class reveals that debt, hedge and derivatives and money market assets grew the most, by 45 per cent YoY, 28 per cent YoY and 26 per cent YoY respectively, whereas miscellaneous assets dropped by 86 per cent YoY. On the other hand, the number of mutual fund subscribers fell to 220,300 in 2017 from 226,200 a year earlier.
Globally, China’s official gauge of manufacturing growth came in at the lowest level in 20 months in February thanks to a month-on-month slowdown that was unusually sharp. The manufacturing purchasing managers’ index published by China’s National Bureau of Statistics fell to 50.3 in February, down a full point from January and marking the largest fall in more than six years. The fall left the gauge the closest to the 50-point mark. The statistics bureau said in a regular explanatory note released alongside the latest figures that the adjustment was typical of the slow season for manufacturing early in the calendar year centred on the shifting lunar new year holiday, when migrant workers return to their home villages and output typically dips.
Regionally March will be an important month. FTSE will decide in March whether to label Saudi Arabia an emerging market while the prospects of rate hike in the upcoming Fed meeting are high as well.
If the FTSE review of Saudi upgrade materialises, the market will witness a run-up during this period until actual inclusion (mostly in 2019), as seen historically.
(Credit: U-Capital)
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