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Oman’s capital market size grows to RO 20.24 bn in pandemic-hit 2020

Positive trends: RO 3.5 billion sukuk and bonds help finance developmental and investment initiatives
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Oman’s capital market grew a significant 7.86 per cent in volume to reach a value of RO 20.24 billion at the end of 2020, up from RO 18.77 billion a year earlier – an increase that attested to heightened trading activity and investment interest notwithstanding disruptions unleashed by the pandemic and the wider economic downturn.

The Capital Market Authority (CMA) ascribed the market’s positive performance partly to the array of measures adopted by the regulator, in conjunction with other government stakeholder institutions, to help mitigate pandemic-related impacts to trading operations.

“The Sultanate of Oman and the world witnessed in 2020 an exceptional (twin crisis) that required taking precautionary and corrective measures at the local and global levels to reduce and mitigate the loss of human life and economic consequences of the Covid-19 pandemic. The Sultanate’s response received commendation and praise,” Shaikh Abdullah bin Salim al Salmi (pictured), CMA Executive President, stated in the Authority’s newly released 2020 Annual Report.

The pandemic, according to the report, led to a global recession and economic downturn that disrupted stock markets around the world and caused investors to flee to safe havens. “Continuation of the financial market and trading in the Sultanate was inevitable in the exceptional circumstances to measure the impact on the economy and the participants to detect any symptoms for timely remedy, besides enabling all market participants to exercise selling and buying transactions without hindrance to achieve the market’s role in facilitating financing and stimulating investment for all the parties,” it stated.

Al Salmi noted in particular the capital market’s important role in financing developmental projects and investment initiatives mainly through long-term debt instruments, such as sukuk and bonds.

The total value of bonds and sukuk listed on the Muscat Stock Exchange was in the order of RO 3.5 billion at the end of 2020, with Sukuk representing about 20 per cent (RO 733 million) of this figure, and bonds accounting for the remaining 80 per cent (RO 2.8 billion). In addition, as many as 16 issues of corporate bonds worth RO 551 million and six corporate Sukuk issuances totaling RO 173 million are listed as well.

As anticipated, there were no new Initial Public Offerings (IPOs) during 2020 as companies held off from going public due to pandemic-induced market uncertainties. However, RO 796 million worth of issuances of investment and real estate funds were listed on the market as of end-2020, the report added.

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