As expected, the domestic financial market witnessed calm activities in the first week of the holy month. Further, the rapid developments in the other Gulf markets in terms of the results and announcements attracted more attentions and supported intermarket movements. Continued pressure on certain local stocks was also noted. The MSM30 closed down by 1.15 per cent at 4,564.45. Sub-indices closed down led by the Industrial Index (-2.75 per cent) then the Service Index (-0.84 per cent) and the Financial Index (-0.7 per cent). The MSM Shariah Index also closed down by 1.22 per cent.
In a disclosure to MSM, Ominvest said that Oman Arab Bank SAOC (a subsidiary of Oman International Development and Investment Company SAOG) wrote to Alizz Islamic Bank SAOG to explore the possibility for a Strategic Collaboration that may lead to an eventual merger of the two entities.
According to the announcement, this potential Strategic Collaboration will be subject to both institutions agreeing on the terms of the transaction and subsequent approvals from the respective Board of Directors, Shareholders and the Regulators.
The move will create a lender with assets of about RO 2.81bn, taking Oman Arab Bank from its current position as 6th largest bank in Oman to 5th largest in terms of total assets.
Oman Arab Bank’s net loans are RO 1.74bn and Alizz’s Islamic financing is worth RO 506.5m as of Q1 2018. Oman Arab Bank has RO 1.77bn in customer deposits and Alizz has RO 542m (merged entity will have RO 2.32bn in total deposits). If the merger goes through, then the merged entity is expected to have a credit market share of 9.5 per cent and deposit market share of 10.5 per cent as of 1Q18.
Taageer Finance said that its issuance of Unsecured, Non-Convertible, Sub-ordinated Bonds through Private subscription for an amount RO 5m (plus a green shoe (additional) option of RO 2.5m has been closed for an amount of RO 6.150m and the approval of Capital Market Authority (CMA) has been received.
Oman National Engineering & Investment Company SAOG (ONEIC) said that it was awarded the contract for Operation & Maintenance of Shaleem and Al Hallaniyat Island power and desalination Plant at Wilayat Shaleem & Al Hallaniyat — Dhofar Governorate by Rural Areas Electricity Company SAOC for the sum of RO 925,556 for the period of (4) years commencing on 1/7/2018. The Public Authority awarded another tender to the company for Electricity and water worth RO 16.28m. This results in total awarded contracts value of RO 22.1m during this year as per the available data on MSM. In the weekly technical analysis, as we mentioned in our previous report “the opportunity to MSM to reach the level of 4,644 points soon”.
This is actually what happened and verified our recommendation as end of the week MSM30 index closed lower than this level. Technical analysis indicators indicate that the MSM index will reach 4,500 points in the coming period.
In a major step towards bringing in foreign investment, the Ministry of Housing in Oman is considering a proposal to introduce regulations that will allow expatriates to own properties in designated places other than Integrated Tourism Complexes (ITCs) in Oman. Such move will support the real estate sector and attract foreign direct investments.
Data related to foreign investments by sector showed higher ownership in the Industrial Sector on yearly basis in 4M 2018. Data, which was released by the MSM, indicated an ownership percentage of 11.45 per cent in the industrial sector during 4M 2018 versus 9.91 per cent for the same period last year.
On the other hand, both the Financial and the Services sectors registered lower foreign ownerships during the same comparable periods by 98 and 131 basis points respectively.
Recent data published by the National Centre for Statistics and Information (NCSI) showed that the daily average production of oil during Jan-April 2018 almost remained stable on annual basis at 967.2k while the average price per barrel jumped by 22 per cent to $62.9/bbl.
The average export percentage of the total production stood at 84.9 per cent in same period compared with 83.9 per cent during Jan-April 2017. China continues to dominate the importers with an average share of 78.3 per cent followed by India at 15.7 per cent.
[Courtesy: U Capital]
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