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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Oman’s capital market raised RO1.8 billion in finance in 2018

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MUSCAT, JUNE 9 - Oman’s capital market was a source of funding to the tune of RO 1.793 billion in 2018, underscoring its pivotal importance as a platform for raising finance for industrial, commercial and economic projects in the Sultanate. This compares with a contribution of RO 1.927 billion from the capital market to the Omani economy a year earlier, representing a 7 per cent decline over the timeframe. Regardless, it remains an importance generator of finance that continues to be invigorated by new regulations and guidelines adopted during the course of the year, according to the Capital Market Authority (CMA)


“Financial data indicates the role the capital market sector plays as a source of financing to the extent of RO 1.8 billion in 2018. The size of such financing is evidence of the ability of the capital market to pool the savings from the various sectors of the community and directing them to financing the projects and distribution to the different investment sectors,” said Abdullah bin Salim al Salmi (pictured), Executive President of the CMA.


A sizable chunk of the funding came from a total of 13 new issues, corporate bonds and Sukuk that were issued last year, which yielded around RO 777.37 million in finance. Private placements by closed joint stock companies (SAOC) helped raise RO 417.08 million, while a total of 19 Rights Issues by SAOC and SAOG firms pitched in a further RO 228.6 million. Contributions also came in the form of bonus shares, capital formalisations, and new issues and listings, the CMA stated in its 2018 Annual Report.


Significantly, the capital market sector also grew in size by 1.26 per cent to reach a value of RO


18.18 billion last year, up from RO 17.95 in the previous year. Al Salmi attributed this growth to “the proceeds of the regular market, parallel market and follow up market in addition to the bonds and Sukuk market which all together represent 57 per cent of the total volume of the capital market in Oman”. The closed joint stock companies registered with the capital market represented 43 per cent of the total volume of the capital market sector, he noted.


There was ample activity in the Primary Market following the CMA’s approval of a total of 12 issues during the year of a total value of RO 380.2 million, comprising various securities such as shares and bonds. Furthermore, a flurry of corporate bonds and Sukuk helped energise the debt market in the Sultanate. A total of seven corporate bonds of an aggregate value of RO 270.7 million were approved, comprising perpetual bonds, subordinate bonds and convertible bonds to shares.


The value of the newly listed corporate bonds and Sukuk, which included the Golden Group sukuk of RO 50 million, totalled RO 277.4 million. With these new debt instruments, the total value of corporate bonds and Sukuk ballooned to RO 539.85 million as of end-2018, the CMA stated.


Also in 2018, four issues of government bonds of a total value of RO 500 million were rolled out, effectively boosting the value of government bonds and Sukuk listed on the MSM to RO 2.68 billion by the end of last year. In all, there are 31 bonds listed on the MSM, which include 17 government bonds and 14 corporate bonds. Sukuk listings total five in all, comprising one sovereign Sukuk and four corporate Sukuk.


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