MSX targets sustained investment

MUSCAT, OCT 11

Muscat Stock Exchange (MSX) is broadening its focus from building liquidity to attracting sustained investment, developing investment funds and new products as Oman prepares for a possible upgrade to emerging-market status.

Chief Executive Officer Haitham al Salmi outlined the next phase at a media gathering on Sunday, saying initiatives to support trading were being followed by efforts to widen investment participation.

Exchange-traded funds and other investment funds form part of that effort, alongside continued engagement with international institutions and prospective issuers, he said.

Al Salmi described a progression from liquidity providers to liquidity funds and market-making arrangements. These initiatives had sought to improve trading and reduce concentrated holdings, helping broaden the shares available to investors.

The emphasis was now extending towards sustained investment activity, he said. He pointed to market makers participating through regional links and deploying their own capital as evidence of commercial interest in the Omani market.

That development also demands stronger capabilities from local intermediaries.

Ahmed bin Ali al Maamari, Vice Executive President of the Financial Services Authority (FSA), said brokerage firms had an opportunity to invest more in their businesses, expand their activities and recruit staff.

Some companies were responding to the market’s development, while others remained largely unchanged, he said, warning that firms which failed to adapt faced significant risks.

Al Salmi distinguished between the exchange’s role in opening access to other markets and the commercial role of brokers. MSX could establish links and promote opportunities, but intermediaries would decide which services to offer.

For international investors, immediate preparations include opening accounts, establishing relationships with brokers and custodians, and becoming familiar with the market.

Al Salmi said Oman’s inclusion on FTSE Russell’s watch list provided time for that work, while the exchange continued its international outreach and sought to maintain the conditions required for a potential upgrade.

FTSE Russell announced on October 6 that Oman had joined its Watch List for possible reclassification from Frontier to Secondary Emerging status after meeting the required market-quality, size and securities-count criteria. Oman remains a Frontier market, with the next classification update due in April 2027.

Al Salmi said services for institutional investors were also being developed. Omnibus accounts, which enable investment managers to place orders covering multiple clients or funds, were available and were being refined with the FSA to meet investor requirements.

The exchange wants a more balanced mix of institutional funds, foreign and Gulf investors, domestic institutions and individuals. Individual investors remained important to daily trading, while continued activity and listings would help sustain confidence, he said.

Alongside efforts to broaden participation, MSX is seeking a wider range of issuers.

Al Salmi said discussions with family businesses about listing were taking place, although he did not identify prospective companies or announce dates. Improved market valuations could make selling shares more attractive to business owners, he said.

Government offerings would continue alongside efforts to attract companies from a broader range of sectors, with the relevant investment entities determining which businesses would come to market.

Al Maamari said the wider objective was to build a sustainable capital market capable of financing public and private development projects. Attracting external capital would require effective risk management and lessons from neighbouring markets, he added.

He linked the market’s development to the privatisation programme and the arrival of larger listed companies, while stressing its role as a source of financing alongside banks.

Further product development remains dependent on supporting infrastructure. Al Salmi reiterated a target to introduce derivatives in 2028 at the earliest, with work towards establishing an independent clearing company in 2027 in coordination with the FSA.

The proposed company would act as a central counterparty to manage the risks associated with derivatives.

Al Maamari said the exchange’s competitiveness ultimately depended on the strength of the wider economy, its sectors and the investment opportunities they offered.