The market capitalisation of the Muscat Stock Exchange (MSX) rose nearly 9.3 per cent to reach a value of $57.458 billion at the end of 2021, up from $52.576 billion a year earlier, attesting to a year of healthy growth despite the lingering effects of the economic slowdown.
According to Haitham bin Salem al Salmi (pictured), CEO of Muscat Stock Exchange and Chairman of Muscat Clearing & Depository, closed companies accounted for a $26.515 billion share of this market cap, followed by equities with $18.731 billion and Bonds & Sukuk with a contribution of $11.623 billion.
Addressing a virtual event hosted recently by the Armenia-headquartered Federation of Euro-Asian Stock Exchanges (FEAS), Al Salmi attributed the uptick in the market cap to the listing of a raft of new government-owned companies, as well as the issuance of new bonds and sukuk.
“Although the market situation was challenging, a lot of new companies established in the sovereign sector by the government supported the market cap overall. Plus, because of the financial situation the government issued a lot of sukuk and bonds, as a result of which the market cap increased,” he said.
The CEO noted in particular the significant role that closed companies play in positioning the stock market for growth when they are eventually listed. “Oman is very unique in terms of having closed companies listed. As long as they have shares issued, they can be listed on the exchange, and that gives us a very good source of information on which of these companies can be transferred to the main market and eventually become a public company. So we are very unique in that, although they are not reflected in the market cap because there are no market prices (associated with them), it gives us a good sense of which companies can be transferred to the main market.”
Additionally, the market turnover totalled $2.128 billion in 2021, with equities accounting for $1.676 billion worth of shares traded, while Bonds & Sukuk made up the balance $449.7 million in traded shares. While the number and value of traded shares were significantly higher than the previous year, liquidity challenges weighed on turnover last year – in comparison with the market’s performance over the past five years, he noted.
“We have lost a lot of our trading volumes due to the economic situation in Oman,” the CEO explained. “Oman is a country where more than 70 per cent of financing comes from (hydrocarbons). Because of low oil prices, we faced as a country a huge deficit in the budget, resulting in the loss of a lot of our market trading. The recovery started only in 2022.”
Significantly, all of the indices of the stock market recorded positive growth in 2021. The Main MSX 30 Index climbed to 4,129.542 points at the end of last year, up from 3,658.770 points a year earlier, registering an increase of 13 per cent. The MSX Shariah Index too grew 2 per cent to 531.770, while the MSX Total Return Index soared 19 per cent to 4,969.307 last year. The sectoral indices too posted strong gains, led by the Industrial Index which shot up 41 per cent as industrial companies made the transition from losses to profits over the year.
Omanis remained the biggest investors in the stock market, accounting for 85.49 per cent of total shares purchased (worth $1.816 billion) and 86 per cent of shares sold (worth $1.827 billion). Share purchases by non-Omani investors totalled $308 million in value (14.51 per cent) while share sales amounted to $44.21 million (14 per cent).