MSX to set up two new subsidiaries ahead of planned public listing
Key goals: Omani bourse has ambitions to become a ‘futuristic exchange’ driven by new innovations and technologies
Published: 03:04 PM,Apr 05,2022 | EDITED : 07:04 PM,Apr 05,2022
@conradprabhu -
Muscat Stock Exchange (MSX) says it is exploring the establishment of two new subsidiaries in line with its goal to evolve into a world-class bourse ahead of its planned listing on the Omani exchange in about five years.
According to MSX Chief Executive Officer Haitham bin Salem al Salmi (pictured), one of the proposed entities will emerge from the planned restructuring of the wholly-owned Muscat Clearing & Depository Company (MCD), set up as a central depository of all MSX-listed instruments with an important clearinghouse function as well. The other proposed entity will focus on technological investments in the stock exchange to bring it on par with leading bourses of the region and the wider world.
“At present, we have our own subsidiary, Muscat Clearing & Depository (MCD), but we are planning to have another subsidiary to handle Central Counterparty (CCP) risks. And perhaps, we can have another one to invest in the technology part. All of these subsidiaries are proposed to be consolidated into the MSX Group, which will then get listed in five years’ time.”
The CEO made the observations during a recent virtual event hosted by the Armenia-headquartered Federation of Euro-Asian Stock Exchanges (FEAS).
The proposed new subsidiaries, Al Salmi said, are part of an array of initiatives envisaged by the MSX as it transitions from an independent stock exchange, owned by Oman Investment Authority, into a publicly traded company via an eventual listing on the Omani bourse. Notable has been MSX’s recent announcement declaring all listed companies open to 100 per cent foreign investments (save for those with an inbuilt ceiling on foreign investment).
To help streamline and optimise its depository and clearing house functions, a new spinoff is envisaged, said the CEO. “Currently, we have a clearing house and depository in the same organisation. But we aim to separate the two functions in order to establish a Central Counterparty (CPP) company that does settlements with a very high risk mitigation and management. This is meant to mainly cover the counterparty risk, especially when we introduce new and complicated products like derivatives and commodities and so on, where the counterparty risk becomes very high.”
Additionally, the MSX has aspirations to evolve into a ‘futuristic exchange’ – a goal that will warrant investments in new innovations and technologies, said Al Salmi.
“As MSX, we believe that technology is the best way to achieve our goal, and being a futuristic exchange is our main interest using technology to enhance our financial performance. We believe in smart exchanges'', he stressed.
The official noted in particular the importance of technologies of the 4th Industrial Revolution to help achieve the long-term ambitions of the MSX. “We believe that Big Data is what we need -- data becomes the future oil for the industry. Having Big Data will help us to understand and analyse data, and find the gaps to perform better. It will also help us to provide future services based on robotics, Artificial Intelligence (AI) and so on.”
Also in the bourse’s sights are digital assets, the CEO stated. “We cannot ignore that markets are now facing a big challenge in terms of having digital assets. Digital assets become very important in terms of market volume, which is projected to touch almost $2 billion. We want to be part of this'', he added.
Muscat Stock Exchange (MSX) says it is exploring the establishment of two new subsidiaries in line with its goal to evolve into a world-class bourse ahead of its planned listing on the Omani exchange in about five years.
According to MSX Chief Executive Officer Haitham bin Salem al Salmi (pictured), one of the proposed entities will emerge from the planned restructuring of the wholly-owned Muscat Clearing & Depository Company (MCD), set up as a central depository of all MSX-listed instruments with an important clearinghouse function as well. The other proposed entity will focus on technological investments in the stock exchange to bring it on par with leading bourses of the region and the wider world.
“At present, we have our own subsidiary, Muscat Clearing & Depository (MCD), but we are planning to have another subsidiary to handle Central Counterparty (CCP) risks. And perhaps, we can have another one to invest in the technology part. All of these subsidiaries are proposed to be consolidated into the MSX Group, which will then get listed in five years’ time.”
The CEO made the observations during a recent virtual event hosted by the Armenia-headquartered Federation of Euro-Asian Stock Exchanges (FEAS).
The proposed new subsidiaries, Al Salmi said, are part of an array of initiatives envisaged by the MSX as it transitions from an independent stock exchange, owned by Oman Investment Authority, into a publicly traded company via an eventual listing on the Omani bourse. Notable has been MSX’s recent announcement declaring all listed companies open to 100 per cent foreign investments (save for those with an inbuilt ceiling on foreign investment).
To help streamline and optimise its depository and clearing house functions, a new spinoff is envisaged, said the CEO. “Currently, we have a clearing house and depository in the same organisation. But we aim to separate the two functions in order to establish a Central Counterparty (CPP) company that does settlements with a very high risk mitigation and management. This is meant to mainly cover the counterparty risk, especially when we introduce new and complicated products like derivatives and commodities and so on, where the counterparty risk becomes very high.”
Additionally, the MSX has aspirations to evolve into a ‘futuristic exchange’ – a goal that will warrant investments in new innovations and technologies, said Al Salmi.
“As MSX, we believe that technology is the best way to achieve our goal, and being a futuristic exchange is our main interest using technology to enhance our financial performance. We believe in smart exchanges'', he stressed.
The official noted in particular the importance of technologies of the 4th Industrial Revolution to help achieve the long-term ambitions of the MSX. “We believe that Big Data is what we need -- data becomes the future oil for the industry. Having Big Data will help us to understand and analyse data, and find the gaps to perform better. It will also help us to provide future services based on robotics, Artificial Intelligence (AI) and so on.”
Also in the bourse’s sights are digital assets, the CEO stated. “We cannot ignore that markets are now facing a big challenge in terms of having digital assets. Digital assets become very important in terms of market volume, which is projected to touch almost $2 billion. We want to be part of this'', he added.