MSM30 Index rises as results season commences

In the past week, the local financial market witnessed an improvement in performance and activity backed by good trades on specific stocks and increasing speculations, as well as increasing focus on small-cap stocks. In addition to the discussions held by some companies which supported investors’ confidence and knowledge about their future plans. It is important to note that trading on the last day was cancelled due to technical issues.
The MSM30 ended the week up by 1.12 per cent at 3,983.79. All sub-indices closed up lead by the Industrial Index (+2.45 per cent), then the Services Index (+1.04 per cent) and the Financial Index (+0.47 per cent). The MSM Shariah Index closed up by 2.32 per cent w-o-w.
Ooredoo Oman announced that it has signed a long-term agreement (seven years) with FRiENDi Mobile to provide mobile services to FRiENDi customers. This, as per the company, shall result in increasing Ooredoo Oman customer base by 21 per cent, a move that might result in better earnings, the source said. This agreement is subject to the approval of the Telecommunications Regulatory Authority. It is worth stating that Ooredoo Oman mobile market share is 44.5 per cent as of December 2018. Oman National Engineering & Investment Co SAOG said that the Ministry of Health has awarded the company contracts related to operation and maintenance at various health units at some governorates for a total value of RO 10.78 million, resulting in total value of contracts of RO 14.2 million in this year.
National Bank of Oman and Ominvest have signed a long-term secured credit facility agreement for RO 80 million to support Ominvest’s initiative for diversification and long-term growth in the Sultanate. The Central Bank of Oman (CBO) announced the new issue of Government development bonds. The size of the new issue is fixed at RO 100 million with a maturity period of 7 years and will carry a coupon rate of 5.75 per cent p.a. The issue will be open for subscription from April 11 to 21 April while the auction will be held on April 23, 2019. The issue settlement date will be on April 28, 2019. Interest on the new bonds will be paid semi-annually on October 28 and April 28 every year until maturity date on April 28, 2026. It will be worth mentioning here that government last issued 7yr GDB in 2018 (Issue 58) with coupon rate of 5.75 per cent and accepted average yield of 5.49 per cent.
Till date 14 companies have announced results of 1Q’19. The data showed increase of 4.4 per cent YoY in net earnings at RO 7.13 million compared to RO 6.83 million in 1Q18. Best performers were Dhofar Cattle Feed, Voltamp Energy, National Biscuit and Al Anwar Ceramic Tiles.
To date and based on the disclosures on the MSM website, eight listed companies have announced increase in their share capital though bonus shares with total value of RO 52.15 million.
Oman’s new mining law, which was introduced recently, authorises seizure of undeveloped concessions. Now, mining licence holders are liable to forfeit their rights to their concessions if they fail to make the requisite initial investments in exploration or prospecting activities under the newly enacted Oman Mining Law a measure that will end the longstanding practice of many licensees accused of permanently holding on these assets while doing little to harness this national wealth.
There are three key advantages linked to the new legislation: Firstly, it expedites the process of obtaining mining licenses, the awarding of concession blocks against competitive bidding, and the processing of applications for no-objection certificates in a time-bound fashion. Secondly, it outlaws illegal mining activities and demands that all mining operations be carried out in a professional manner. Thirdly, it greatly strengthens the ability of the Authority to manage the sector in a supportive way. Bahrain Bourse topped the GCC financial markets up by 1.35 per cent while Kuwait Stock Exchange was the least gainer during the week up by 0.18 per cent.
IMF issued its semi-annual economic update report last week and slashed growth forecast across the board for all GCC countries. UAE will be the fastest growing economy during 2019 while in 2020, Oman will lead the pack with growth of 6.2 per cent in 2020. Saudi is estimated to grow by 1.8 per cent and 2.1 per cent in 2019 and 2020 while growth in the Kingdom is expected to stabilise at about 2.25-2.50 per cent over the medium term, as stronger non-oil growth is countered by the subdued outlook for oil prices and output.
Saudi Arabia CMA last week issued the procedures of applying for financial restructuring under the bankruptcy law, details of which are following:
n The issuer of Tadawul-listed securities must immediately disclose to both the authority and the public all related developments and state their impact on the business or the issuer’s financial position
n Issuers must also disclose any non-confidential material developments included in the submitted reports upon applying for financial restructuring.
n If the accumulated losses reached 50 per cent of capital or more, the securities will be suspended until the court orders commencement of the financial restricting procedures, unless the issuer is banned from carrying out activities.
n The securities will be delisted if the court decides to terminate the financial restructuring procedure and orders liquidation.
(Courtesy: U-Capital)