MSM weekly performance best in GCC

The performance of the general index improved during the past week on relatively better investment sentiment, investment positions by individuals in a number of leading companies and capturing opportunities in equities, which were trading at attractive levels, which we mentioned in our previous report. MSM30 ended the week with good gains up by 2.42 per cent supported by all sub-indices which were led by the Financial Index (+2.19 per cent) then the Services Index (+0.52 per cent) and the Industrial Index (+0.21 per cent). The MSM Shariah Index closed stable at 607.75 points.
Dhofar Generating Company revised its offer price down from RO 0.259/share to RO 0.225/share last week, without any change in financials or dividends. Hence, as per the report issued by U Capital, the upside now changes from 10 per cent to 27 per cent to RO 0.286/share and at the offer price the price to book multiple comes out to be 1.0x and the dividend yield stands at 8.0 per cent compared to 6.95 per cent earlier.
The two listed cement companies’ total revenue for H1 2018 saw an increase of 2.1 per cent YoY at RO 68.2 million while operating profit went down by 46.8 per cent. On standalone basis, Oman Cement revenue dropped by 13.6 per cent due to both lower sales and realisation while on the other hand, Raysut Cement revenue went up by 14.5 per cent on better sales of volumes due to change in pricing policy. At net profit level, Oman Cement registered a decline of 5.2 per cent while Raysut Cement saw a notable drop in net profit by almost 84.8 per cent. As per Raysut Cement BOD report, reasons behind this drop include 1) lower price realisation per tonne, 2) higher consumption of packing materials, 3) higher shipping costs to terminals, 4) Increase in other factor overheads, G &M and selling and distribution costs in addition to 5) reduction in fair market value of securities held by the company. Total cement sales stood at 2.8 million tonnes for H1, 2018, an annual increase of 2.5 per cent.
Production of minerals in Oman touched 29.96 million tonnes and for building materials 43.4 million cubic metres, i.e. an increase of 24 per cent and a decline of 5 per cent respectively on annual basis as per the latest Statistical Year Book published by the National Centre for Statistics and Information. Building materials ranked first with 59.2 per cent of the total production followed by limestone (24.6 per cent), gypsum (11.5 per cent) and marble 1.8 per cent. In terms of value of the total production, it came at RO 139.8 million representing an increase of 5.2 per cent from 2016. Out of total values, building materials value stood at RO 65.5 million (i.e. 46.9 per cent of total value), then chromite (15.8 per cent), Gypsum (12.9 per cent), Limestone (10.6 per cent) and Marble (9.3 per cent).
Mining and quarrying sector showed that its contribution to Oman GDP at current prices went up from 0.34 per cent in 2012 to 0.54 per cent in 2017 with a CAGR of 8.5 per cent compared with a negative CAGR of 0.99 per cent registered by the GDP during the same period.
Data extracted from Oman Public Finance showed that corporate income tax for 5M’18 stood at RO 352.3 million, up by 23.9 per cent YoY and represented 8.6 per cent of total public finance revenue. Further, during 2010-17, mixed companies & establishments average tax income formed 52 per cent of total corporate income tax followed by Omani companies and establishments with 36 per cent then foreign companies and establishments for 7 per cent and finally non-resident companies in Oman at 5 per cent.
Muscat Securities Market topped the gainers this week as it was up by 2.42 per cent on weekly basis while Dubai Financial Market lost the most and was down by 1.81 per cent during the week.
Analysis regarding GCC stock markets revealed that total market cap went up by 8.2 per cent YoY by end of 1H’18 at $1.054 trillion backed by all of the markets. Tadawul Market added the most at $ 58.8 billion, which is 73.4 per cent of the total additions. Also, Tadawul Market cap forms 50.2 per cent of total GCC financial market capitalisation in H1, 2018 compared with 46.7 per cent for 2017. Data published by the Arab Federation of Exchanges suggest that total value of the traded shares during H1, 2018 was $159.4 billion which is 4.9 per cent lower on yearly basis. (Courtesy: U Capital)