Blue-chip stocks lead market decline

The Muscat stock market remained under pressure as some blue-chip stocks witnessed hefty trade and remained under pressure as well. Along with that, some companies went ex-dividend as well during the week. Trading values however picked up during the week while trading volumes declined. The MSM30 is currently at its eight-month low at 4929.80 and ended the week down by 1.64 per cent.
All sub-indices ended the week with a negative performance led by the Services Index, which closed the week down by 2.04 per cent, followed by the Financial Index at 0.39 per cent and industrial Index at 0.39 per cent. Shariah Index also closed down by 1.48 per cent.
The IPO season has kicked off in Oman this year with Arabia Falcon Insurance announcing its timeline for the IPO. The company announced the opening of its IPO for public subscription from March 4 . It will close on April 2, 2018 and is expected to list on April 16, 2018. Through its IPO, Arabia Falcon Insurance is offering 25 million shares at a price of 190 baisa per share, comprising a nominal value of 100 baisa per share, premium of 88 baisa, and offer expenses of 2 baisa per share. The Company was formed after the merger between Falcon Insurance Company and Arabia Insurance. The company aims to build on the recent merger that has created a synergy between two strong market players in the country. The company expects to pay its first dividend in April 2018.
Galfar Engineering and Contracting disclosed the winning of a Contract. Company was awarded a subcontract for the “CMEI Works Package 1” for the Salalah LPG Project of Salalah SFZCO LPG LLC” by Petrofac E&C Oman for approximately $41m. The completion period of the works of the subcontract is approximately 21 months starting from 26/2/2018. With this contract, the total value of awarded contracts to Galfar during this year is RO 58.4m based on the disclosures on the MSM website.
Oman National Engineering & Investment Company SAOG (ONIEC) entered into an agreement with Public Authority for Social Insurance (PASI) for collection of PASI fees through its electronic applications and branches all over Oman for an agreed commission. Duration of the agreement is one year and it is renewable. The project is in line with ONEIC strategic plan to develop electronic collection applications in order to diversify its income resources.
In the weekly technical analysis, MSM index is closing below 5,000 points during the current period. The MSM index will move towards the first support level at 4,888 points.
Latest CBO data indicates that the weighted average interest rate spread (lending rate minus deposit rate) on Omani Rial contracted by 0.1 bps on month-to-month (MoM) basis, at 3.537 per cent for the month of December 17, on account of a lower weighted average lending rate (5.204 per cent), and in spite of a MoM decrease in weighted average deposit rate which averaged at 1.667 per cent. However, RO spread is still 5.4bps below December 16 level. Weighted average FCY spread rose by 26.8bps in December 17 (at 3.111 per cent) over the previous month. The spread is higher by 74bps when compared to December 16. Weighted average interest rate on private sector OMR time deposits remain stable around 3.55 per cent over the last 3 months. Weighted average interest rate on ALL private sector deposits (RO) jumped to 1.43 per cent in December 17 when compared to an average of 1.30 per cent over the last 3 months.
The number of small and medium enterprises (SMEs) registered by the Public Authority for Small and Medium Enterprises Development (Riyada) reached to 606 by the end of January this year, bringing the total number of these institutions to 32,441, according to preliminary data released by the NCSI. Muscat Governorate was on top with the largest number of SMEs. The total number of SMEs in the governorate is 10,490. SMEs in the North Batinah Governorate reached to 4,988. Al Dakhiliyah governorate registered SMEs reached to 4,402.
All markets fell during the week except Saudi Arabia. Qatar exchange closed the week down again the most by 4.83 per cent while Tadawul rose the most by 2.04 per cent. Oman and Dubai bourse dropped during the week by 1.64 per cent and 1.61 per cent respectively.
Regionally, Saudi Arabia is expanding the refinancing of a $10bn international loan to raise $16bn due to strong demand, its Debt Management Office said. Saudi Arabia raised about $36bn in 2017, including $14bn of domestic bonds and $22bn from international debt markets. The new $16bn loan will be priced “at a margin representing a 30 per cent reduction from levels set in 2016,” the debt management office of the ministry of finance said.
The total GCC banking sector posted a total net profit of $ 32.6bn in FY’17, up by 8.2 per cent YoY. On quarterly basis, total GCC banking sector net profit touched $ 8.0bn in Q4’17 (-5.6 per cent QoQ; +27.9 per cent YoY). Saudi banks contributed 37 per cent to the total net profit, and the UAE contributed 31 per cent, followed by Qatar at 17 per cent, Kuwait at 8 per cent, Bahrain at 4 per cent and Oman at about 3 per cent. Within the GCC, an analysis of banks for FY’17 earnings indicates that the UAE banks posted the highest increase in annual net profit at 10 per cent YoY, followed closely by Kuwaiti banks at 9 per cent, Saudi banks at 8.8 per cent YoY, Qatari banks at 5.8 per cent and Bahrain at 4.2 per cent YoY. Omani banks’ total net profit, however, remained flat on YoY basis.
(Courtesy: U Capital)