Ignoring the strong fundamentals and the good performance of most of its listed companies, in addition to the recent rally in oil prices (Oman Oil) which reached its highest level since November 2014, MSM30 declined in the last week by 0.93 per cent at 4681.51. This was mainly due to the already existing cautious sentiment among investors in addition to the geopolitical tensions affecting primarily foreign institutional investment. The previous week registered a number of special deals with total value of RO 27.46 million mainly on Al Batinah Power, Al Suwadi Power, Sharqiyah Desalination and Bank Dhofar.
Sub-indices closed down led by the Services Index (-0.84 per cent) then the Industrial Index (-0.62 per cent) and the Financial Index (-0.27 per cent) while the MSM Shariah Index went up by 0.18 per cent on the same basis. The Capital Market Authority has issued a preliminary approval for the conversion of Sohar Poultry Co SAOG from a public listed joint stock company to a close joint stock company and also approved that Sohar Poultry Company SAOG shareholder, (Atyab IFFCO Poultry LLC), to purchase the shares of the company’s minority shareholders that wish to sell any portion of their shareholding. The Major Shareholder Atyab IFFCO Poultry LLC proposes to purchase shares for a value of 787 baisas per share, from the interested shareholders who intend to sell their shares. The last stock price stood at 206 baisas per share.
Dhofar Insurance Co (after it got shareholder approval) has reduced its registered paid-up share capital from RO 20 million to RO 10 million. According to the Q1 2018 financials, the accumulated losses stood at RO 20.76 million.
As of latest financial numbers issued by the listed companies on MSM, 22 companies have negative retained earnings. Accumulated losses of those companies account to RO 213.0 million. Al Hassan Engineering leads amongst all with accumulated losses of RO 67.5 million followed by Alizz Islamic Bank and Renaissance Services at RO 22.7 million and RO 21.8 million, respectively.
MSM has issued administrative decision about listing of transfer of public joint stock companies. The decision, which came in accordance with the criteria, set out in Article (39) of the Executive Regulations of the Capital Market Law, as amended by Administrative Decision No 5/2016 issued by the Capital Market Authority.
It was decided to transfer some shares among main markets as follow: Al Madina Investment Co, Shell Oman Marketing, Al Maha Petroleum Products Marketing, Raysut Cement, NBO, Taageer Finance, HSBC Bank Oman, Oman Flour Mills and Oman Cables Industry from the Regular to the Parallel Market due to violating some conditions. Also, the transfer of Oman National Engineering and Investment Co, United Finance and Dhofar International Development and Investment Holding from the Parallel Market to the Regular Market as they met all the required conditions. Furthermore, National Mineral Water from Under Monitoring to the Parallel Market as it met the shareholders equity criterion.
In the weekly technical analysis, as we mentioned in our previous report, that if MSM index break of this level 4,730 points will press the index to reach 4,680 points and this what happened. After this point the opportunity to MSM to reach the level of 4,644 points soon.
It is worth stating that total refineries production in Q1 2018 stood at 16.79 million barrel, up by 18.9 per cent on yearly basis mainly supported by higher production of Aviation Fuel Oil (up by 105.6 per cent on the same basis). Out of the total production, Gas Oil formed 41.2 per cent followed by both Aviation Fuel Oil and M-91 (each 16.8 per cent) then M-95 (16.5 per cent) and finally LPG (8.8 per cent). Domestic sales came at 72.7 per cent of the total production where the balance was exported.
Regarding petrochemicals production, NCSI data showed that the total production in Q1 2018 stood at 264k MT, up by 32.7 per cent on yearly basis mainly supported by better production of Paraxylene which is mainly used to produce polyester which is used in turn to manufacture textile fibre. Paraxylene formed 56.4 per cent of the total petrochemicals production.
Domestic sales came at only 5.7 per cent of the total production where the balance was exported.
Al Anwar Holding (AAH) held its Analyst and Investor Meeting at the CMA during the week. The company is foraying into cement manufacturing business by setting up a new cement company in Duqm called Hormuz Al Anwar Cement SAOC, where AAH is investing RO 1.6 million for a 40 per cent equity stake in the total project value of RO 10.5 million (targeted debt of 60 per cent). The cement company will import clinker from Iran (from their Iranian partner). The company is also pursuing hotel business, where it has acquired land near the airport to build a hotel (Novotel 4-star) for a total investment of RO 11.6 million.
Construction will start in a 2-3 months. The hotel’s break-even is expected to be achieved in 3 years’ time. The company is aiming to establish an education portfolio as it is a defensive, long-gestation sector with limited but safe returns. [Courtesy: U-Capital]
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