Last week, the market witnessed decline in speculative activities and modest trading volumes. Several stocks were under selling pressures while GCC institutional investors were net buyers. The MSM30 ended the week down by 1 per cent at 3,940.37. All sub-indices closed down lead by the Industrial Index (2.2 per cent), then the Financial Index (1.53 per cent) and the Services Index (0.31 per cent). The MSM Shariah Index closed down by 0.94 per cent w-o-w.
On April 19, S&P rating agency cut its outlook on Oman to negative from stable while affirming its ‘BB/B’ long- and short-term foreign and local currency sovereign credit ratings on the country. S&P ratings has generally not affected the Oman stock market performance in the past and the same was witnessed this time around as well. Performance of the market post either the outlook change or rating change, the week after, has remained mixed. Even the same was witnessed in the bond prices as well in the last two events.
In the weekly technical analysis, as we mentioned in our last report that MSM index will be down to 3,940 points which were verified and happened end of last week. MSM30 index will face towards the level of 3,900 points. Currently MSM index still in the downtrend channel to exit from this channel it needs to close above 4,040 points.
We continue to see a good response to the government issuance of development bonds as the recent issue 60 (7-year bond) auction results showed that the total subscription amount stood at RO 187.4 million (1.87x) versus the allotted amount of RO 100 million, thus showing continued trust in the government. The accepted average yield is 5.52 per cent at a price of RO 100.515. As per our database, the last 7-year development bond (Issue 58) issued in September 2018, offered an average yield of 5.49 per cent at a price of RO 101.495
Recent data published by the National Centre for Statistics and Information (NCSI) showed that the daily average production in 1Q’19 went slightly up by 0.4 per cent YoY to 970.5k while the average price per barrel dropped by 3 per cent to $61. The average export percentage of the total production in 1Q’19 stood at 83.2 per cent compared to 83.5 per cent in1Q’18. China remains the top importer of the Omani Oil with a stake of 80.5 per cent followed by Japan (6.6 per cent).
Recent data about telecom subscribers revealed that total internet subscribers continued to increase as they were up by 3.9 per cent in Mar’19 compared to end of 2018 at 439.9k. Total fixed telephones lines grew by 2.3 per cent to 572.2k as well as total mobile subscribers which increased by 0.8 per cent to 6.49m on higher postpaid mobile subscribers. Active mobile broadband subscribers also went up by 0.2 per cent to 4.12 million subscribers.
We have witnessed surge in SMEs over the past few years in Oman, highlighting their increasingly important role in diversifying Oman’s economy. SMEs in Oman have grown from 23,221 in December 2016 to 38,762 at the end of March 2019. Majority of those are located in Muscat Governorate at 36 per cent followed by 19 per cent in Al Batinah North and 9 per cent in Al Batinah South, while the rest distributed across eight other governorates in the country.
Abu Dhabi Securities Exchange topped the GCC financial markets up by 1.89 per cent while Kuwait Stock Exchange declined the most during the week down by 1.73 per cent.
Saudi Arabia recorded a budget surplus of SAR27.8 billion ($7.41 billion) in 1Q19 in the January-March period, its first since oil prices plunged in 2014. Revenue during 1Q19 rose by 35 per cent to SAR 225 billion. Oil revenue rose by 31 per cent to about SAR149 billion in the first quarter from around SAR114 billion in the same period last year, while non-oil revenues grew by 46 per cent to SAR76.3 billion in 1Q19, up from SAR52.3 billion in 1Q18. The Kingdom reported surplus of SAR27.8 billion in 1Q19 compared to deficit of SAR34.3 billion in 1Q18.
Other announcement included:
n Foreign direct investment in Saudi Arabia increased by 28 per cent in the first-quarter.
n The country is also launching a $3.33 billion initiative to support the growth of the private sector, including SMEs.
Owing to expected index inclusion, Kuwait is witnessing increases in foreign ownership across the board. So far during 1Q19, Kuwait market has witnessed net foreign inflow of $ 711 million. Majority of this inflow was witnessed in the month of March, amounting to $464 million. Banks in particular are witnessing higher inflows and almost all banks saw an increase in their foreign ownership levels.
(Courtesy: U-Capital)
Oman Observer is now on the WhatsApp channel. Click here
