Friday, March 29, 2024 | Ramadan 18, 1445 H
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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Dividend season and increased speculation raise market benchmark

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Better performance posted by the local financial market in the previous week, which witnessed a rise in speculative activities and a clear entry of local individuals in addition to healthy announcements of dividends and a number of special deals. The MSM30 closed the week up by 2.19 per cent at 4,144.47. The Industrial Index led the gainers within the sub-indices as it closed up by 2.06 per cent followed by the Financial Index (+2.05 per cent) and the Services Index (+0.54 per cent). The MSM Shariah Index closed up by 1.03 per cent w-o-w. The MSM total Return Index closed the week flat.


As per data disclosed by MSM, Ubhar Capital ranked as number one brokerage house for the month of February with a market share of 21.4 per cent.


BankDhofar and National Bank of Oman announced that they have decided to discontinue the merger discussions after the parties could not agree on terms for a possible merger transaction.


Raysut Cement Co disclosed that it has signed a letter of intent with the shareholders of Sohar Cement Factory LLC, a limited liability company registered in Oman, with respect to the purchase of all of its shares. According to the disclosures, the parties are currently discussing the terms of the proposed acquisition. Raysut Cement will update shareholders in case of any developments about the topic. It is worth stating that Sohar Cement has a cement-grinding unit with a capacity of around 240 tons per hour, is owned by Sohar Cement (80 per cent) and UAE-based Fujairah Cement Co (20 per cent).


According to the Authority for Electricity Regulation (AER) Oman, the incorporation of Oman’s power sector into the Ministry of Oil and Gas, as mandated by Royal Decree 40/2018, is principally guided by two key premises: (i) coordination of all policy guidance with regard to the electricity sector with the Ministry of Oil and Gas, and (ii) recognising the Ministry’s enhanced role as the sole agency to represent the power sector in the deliberations of the Council of Ministers. In essence, the merger process has no impact on power sector operations on the ground.


All powers and prerogatives previously vested with the Public Authority for Electricity and Water (PAEW) with regard to oversight of the electricity sector, have now transferred to the Ministry of Oil and Gas. Water‐related policymaking, however, remains in the hands of Public Authority for Water.


Promising news related to gas sector were announced last week. BP announced that the gas production will increase by about half a billion cubic feet (bcf) of gas per day in early 2021 when production starts from the field of Ghazeer, which is the second phase of this giant project, stressing that work in the field of Ghazeer is better progressing than expected and according to the implementation schedule. While Oman’s Ministry of oil and gas announced that it is hopeful of announcing “one or two” more gas discoveries in the coming period. Ministry Under‐Secretary said the new finds are in addition to the sizable discoveries announced last year


In the weekly technical analysis, according to our previous report, the MSM has a strong support level at 4,040 points as we mentioned, this level not already crossed by the MSM30 index, but reversed to the upside, the market index will move towards the level of 4,180 points if it closed above this level will be able to jump towards 4,200 points.


Till date, the total proposed cash dividend for the year 2018 is RO 360.04 million. The financial sector contributes 58.5 per cent to the total proposed amount, followed by services at 33.7 per cent and Industrial sector at 5.0 per cent. The total market proposed cash payout stands at 56.4 per cent with yield of 6.6 per cent. The industrial sector’s cash payout tops with 71.2 per cent of earnings proposed to be paid-out as cash, followed by the Services sector at 62.2 per cent and financial sector at 52.2 per cent. The industrial sector leads in dividend yield on proposed dividends at 7.3 per cent, followed by the financial sector at 6.5 per cent and services at 6.5 per cent. Dividend yield offered by Oman is the highest within the GCC. Bahrain yield is at second position after Oman at 5.7 per cent, followed by 5.2 per cent offered by DFM and 4.7 per cent by ADX. Within the region, Saudi Arabia’s yield stands at lowest at 3.3 per cent.


New vehicle registration fell by 19 per cent YoY during first eleven months of 2018 to 59,445 compared to 73,571 in the same period the year before. Average monthly registration of new vehicles dropped to 5,404 in 11M18 compared to 6,688 in the same period the year before. We believe the new vehicle registration is low because of the higher interest rates scenario, lowering expat population and changing in customers behaviours. With expectation of more rate hike in 2019, further impact on the vehicles sales might be seen.


As per NCSI, oman total population stands at 4.66 million in February 2019, almost similar number compared to Feb 2018. However, if we do further analysis, it reveals that the expatriate population dropped from 2.10 million to 2.04 million in 2019 while the Omani population rose from 2.56 million in Feb 2018 to 2.62 million in Feb 2019. Expatriate population has dropped from the highest registered number of 2.12 million in May 2017, drop of 83,000.


Muscat Securities Market topped the gainers up by 2.19 per cent while Qatar Exchange was the worst closing down by 0.78 per cent.


(Courtesy: U Capital)


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