MUSCAT, OCT 7
Oman has cleared the market-size and securities-count thresholds required for Secondary Emerging Market status, prompting FTSE Russell to place it on its Watch List for possible reclassification from Frontier.
The decision, announced on October 6, puts Oman under review for a potential upgrade. It remains classified as a Frontier Market, with FTSE Russell’s next country-classification update due in April 2027.
In its April interim review, FTSE Russell said Oman met all nine Quality of Markets criteria required for Secondary Emerging status but fell short of the minimum investable market capitalisation and securities-count requirements.
At that time, Oman had two Mid Cap and three Small Cap securities meeting the eligibility requirements for the FTSE Global Equity Index Series. Secondary Emerging classification requires at least three eligible Large or Mid Cap securities and at least five eligible securities across the Large, Mid and Small Cap categories.
FTSE Russell has now confirmed that Oman meets both the Quality of Markets criteria and the minimum size and securities-count requirements.
The decision follows a sharp expansion in the Muscat Stock Exchange in recent years. The MSX30 rose from 3,943 points in the third quarter of 2021 to 7,567 in the third quarter of 2026, while market capitalisation increased from RO 22 billion to RO 39.2 billion.
Trading activity grew even more sharply. The value traded during January–September rose from around RO 650 million in 2021 to RO 9.7 billion in 2026.
MSX Chief Executive Officer Haitham Al Salmi said in a media interview earlier this month that an eventual upgrade could attract around RO 175 million into the market, although the final amount would depend on Oman’s weighting in the relevant FTSE indices.
Speaking in an exclusive interview with Observer, Azza Al Habsi, Vice President – Economic Research & Emerging Trends at Ominvest, said the decision recognised the progress made in developing Oman’s capital market.
“The FTSE Watch List decision is an important recognition of how far Oman's capital market has come. It reflects years of coordinated reform across the Muscat Stock Exchange, the Financial Services Authority, Oman Investment Authority and market participants. It is also the beginning of a new phase rather than the end of the journey.” Al Habsi said the next priority was to broaden trading activity and encourage sustained participation by international institutional investors.
“The market today is significantly larger and more liquid than it was even two years ago. The priority now is to build on that progress, so that trading activity broadens across a wider range of companies and international institutional investors participate on a sustained basis. The greatest value of an emerging-market upgrade lies in how it strengthens the structure of the market over time, not only in the initial index-related inflows.” She said increased visibility could help attract private-sector listings, widen the investor base and strengthen the exchange’s role in providing long-term capital to businesses.
“The initiatives already under way, including the listing pipeline, the planned central counterparty and the development of new products, position the market well to achieve that. If this momentum continues, the FTSE process will carry economic significance well beyond the index itself, and will lay the foundation for the next milestone.”
Her emphasis on broader liquidity comes as MSX trading remains concentrated in a relatively small number of companies. A capital-markets analysis reviewed by Observer showed that five stocks accounted for around 75 per cent of traded value in September.
That concentration means the impact of a future reclassification would extend beyond the initial inflows from funds tracking FTSE indices. Broader institutional participation, more private-sector listings and deeper trading across a wider range of companies would help determine its longer-term effect on Oman’s capital market.
FTSE Russell uses its Watch List to identify markets being considered for a change in classification. Oman was not placed on the list in April because it had yet to meet the size and securities-count thresholds. Those requirements have now been met.
The index provider has not confirmed an upgrade or set an implementation date. Its next country-classification update is scheduled for April 2027.
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