Dividends, AGMs influence market movement

The main driver of the market during the past week was dividends and ex dividends trades along with the AGM season, which resulted in heavy trade in particular stocks. The MSM30 ended the week down by 3.54 per cent at 4,005.56. All sub-indices closed down lead by the Financial Index (-4.46 per cent) then the Industrial Index (-3.37 per cent) and the Services Index (-1.12 per cent). The MSM Shariah Index closed down by 3.58 per cent w-o-w. Oman National Engineering & Investment Co, a listed company, disclosed that Mazoon Electricity Company SAOC awarded tenders worth RO 1.56m related to constructing Feeders in addition to other works. Till date, the total value of tenders that been awarded to the company in this year stands at RO 1.9m.

Listed education companies in Oman announced the result for 1H (Sep-Feb). Overall sector profits dropped by 60 per cent during 1H on a YoY basis. Majan College 1H (Sep-Feb), profitability dropped by 24 per cent YoY to RO 726.6k compared to RO 959.2k in same period last year. Major reason for the decline was drop in fee income by 6 per cent. OETI 1H (Sep-Feb), profitability dropped by 89 per cent YoY to RO 126.2k compared to RO 1,167.8k in same period last year. Major reason for the decline was drop in fee income by 13 per cent.

As of December 2018, 29 companies have negative retained earnings (accumulated losses). Overall sum of accumulated losses of the twenty-nine companies stand at RO 217.8m. Out of those companies, 19 companies’ accumulated losses have exceeded 25 per cent of the paid up capital.

As per CBO’s latest statistical bulletin, the total credit of the Omani Banking sector (conventional loans and Islamic financing) stood at RO 25.12bn as at the end of Jan’19, up by 6.1 per centYoY and +0.2 per cent MoM. Total deposits stood at RO ‎‎22.58 billion, up by 4.1 per cent YoY but down by 2.9 per cent MoM.

Total Loan-to-Deposit Ratio increased to 111.2 per cent in Jan’19 from 107.8 per cent a month ago. Conventional banks account for 85.5 per cent of total system credit at RO 21.5 billion as at the end of Jan’19, rising by 4.2 per cent YoY and flat on MoM basis. Credit extended to the private sector remained stable on MoM basis and grew by 2 per cent YoY. Conventional deposits at RO 19.36 billion (+3.8 per cent YoY, -3.4 per cent MoM) form 85.7 per cent of the total banking deposits of Oman. Conventional Loan-to-Deposit ratio stood at 111.0 per cent, up from 107.5 per cent a month ago. Islamic credit stood at RO 3.64 billion (+19 per cent YoY, +1.9 per cent MoM) and Islamic deposits stood at RO 3.23 billion (+5.6 per cent YoY, -1.1 per cent MoM), with Loan-to-Deposit ratio stretching to 112.8 per cent in Jan’19 from 109.5 per cent a month ago.

Another promising gas and condensate find was announced last week. Local Omani Oil & Gas operator Hydrocarbon Finder (HCF) has reported a potentially promising gas and condensate find in its Block 7 concession in the western part of Wusta Governorate. A deep well drilled in the Barik reservoirs in the Block’s well-known Sahmah field struck gas with a “multi-TCF” (Trillion Cubic Feet) potential, alongside “tens of million barrels of condensates”, the company stated. All such oil and gas discoveries are going to aid Oman in the long run and assist in reducing the deficit.

In the weekly technical analysis, as we mentioned in our last report that MSM index crossed down again the level of 4,137 points this will lead the index to reach the level of 4,040 points the strong support level we mentioned this figure many times). Broken his level will allow the index to touch 3,800 points in the coming period.

GCC healthcare companies announced results for the period ending 2018. Overall, sector reported an earnings decline of 58 per cent YoY to $379 million. However, if we adjust the onetime gain registered by Gulf Medical Projects Company amounting to $350 million from 2017, then the sector reported earnings drops of 31 per cent YoY in 2018. Country wise, Qatar reported lowest earnings drop at 7.1 per cent, followed by Saudi Arabia and Kuwait at -27 per cent and -55 per cent, respectively.

Performance of GCC markets was mixed during the month of March with half closing in positive while half in the negative territory. Following chart elaborates top-5 best and worst performing sub-indexes during the month of March.

Overall, global oil supply decreased by 0.16 mb/d to average 99.15 mb/d in February 2019, compared with the previous month. An increase in non-Opec supply of 65 tb/d in February compared with the previous month was mainly driven by the US, the UK and Brazil. This was offset by a remarkable decline in Opec crude oil production of 221 tb/d, which leads to a total increase in global oil output of 1.50 mb/d y-o-y. Opec production averaged 30.55 mb/d in February, a decrease of 221 tb/d over the previous month. Crude oil output decreased mostly in Venezuela, Saudi Arabia and Iraq, while production inched up in Libya and Angola. The share of Opec crude oil in total global production declined by 0.2 pp to 30.8 per cent in February 2019 compared with the previous month.

(Courtesy: U-Capital)