MUSCAT: A trio of Initial Public Offerings (IPO) linked to subsidiaries and affiliates of Oman Investment Authority (OIA) is expected to help energize the Muscat Stock Exchange (MSX) during 2023, according to leading Omani investment firm Ubhar Capital SAOC (U-Capital).
IPO candidates include Abraj Energy Services (Abraj), a leading Omani oilfield and gas services company and a wholly owned subsidiary of global integrated energy group OQ; Majis Industrial Services – an integrated water solutions provider presently operating at Sohar Port and Freezone and the surrounding areas; and OQ Gas Networks – the monopoly owner and operator of the nation’s gas grid.
IPO sizes are reckoned to be around $500 million for Abraj and $800 million for OQ Gas Networks, while Majis is yet to reveal the size of its planned offering, says U-Capital.
In comparison, 2022 was a relatively low-key year on the IPO front, with only two public offerings launched during the year. The Pearl RIEF, the first leveraged sharia-compliant REIF in Oman and only the third real estate investment fund of its kind, was rolled out with an IPO size of RO 23.3 million.
Since its listing on the MSX, the Fund has moved up by 4.46 per cent to RO 0.118/share, up from RO 0.112/share on listing day. The other IPO, launched by Barka Desalination with a public offering of RO 4.4 million in shares, has gained 3.45 per cent in value to end the year at RO 0.150/share, up from RO 0.145/share at listing.
Significantly, investors and market experts envision a phase of sustained growth in the performance of the MSX during 2023, underpinned by a raft of initiatives that were implemented by the regulator, the Capital Market Authority (CMA), as well as the stock exchange, to help develop Oman’s capital market. Many of these initiatives, launched during the course of 2022, flow from the updated Securities Law promulgated in June 2022.
U-Capital explained: “The new Securities Law offers multiple financing options and provides a legal framework for virtual assets. The law keeps pace with the developments brought about by the technological revolution, as it provides a legal framework related to regulating the requirements of Fintech, which contributes to providing financial support to economic sectors using innovative financial solutions. The law also confers on the CMA the power to regulate innovative financing and approval of the application of technology and virtual investments.
Additionally, the law allows expanding financing options by regulating new products and services such as warehouse receipts, derivatives, futures etc. It has created the necessary legislative infrastructure to ensure the independence of the MSX from the CMA as a self-regulated institution, and allowed the stock exchange to regulate brokerage activities, market making and margin financing. Furthermore, the law confers on the CMA the authority to license the establishment of a stock exchange for small and medium enterprises.”
Also during the year, the CMA together with the Muscat Clearing & Depository Company SAOC (MCD) announced a collaboration with Belgium-based Euroclear Bank SA/NV to establish a new Euroclear international central securities depository (CSD) account in the Sultanate of Oman to be operated by MCD.
Going into 2023, the MSX has pledged to finalise guidelines to regulate the activities of market makers and liquidity providers. In addition, the stock exchange plans to launch three new indicators for the total returns of the primary sectors: finance, industry, and services.
Efforts are underway to support the establishment of a dedicated securities market for small and medium enterprises (SMEs) as well.
Oman Observer is now on the WhatsApp channel. Click here
