FINANCIAL FLEXIBILITY: Fitch affirms stable ranking for banking sector - Foreign Direct Investment (FDI) in the Sultanate hit $18.54 billion in 2016 compared to RO 2.57 billion in 2000, according to the investment report 2017 by the United Nations Conference for Trade and Development (UNCTAD).
The report, which was published on its website, said that the FDI in the Sultanate grew by $3.56 billion over the past six years as it stood at about $14.98 in 2010. The report affirmed that the global investment has witnessed modest recovery as forecast for 2017 remain optimistic with caution.
The global FDI inflows are expected to hit $1.8 trillion in 2017 and increase to $1.85 trillion in 2018.
The report said that the FDI inflows in the world declined by 2 per cent in 2016 to $1.75 trillion due to the slow economic growth and general policy risks. It added that the FDI to the developing countries declined by 14 per cent to $646 billion in 2016.
The FDI to Asia also declined by 15 per cent to $443 billion.
Meanwhile, Fitch Ratings has maintained a stable outlook for Oman’s banking sector with ‘BBB’ rating for long-term foreign and local currency issuer default ratings (IDRs). Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDR) of HSBC Bank Oman (HBON) at ‘A-’ and Bank Muscat (BM) at ‘BBB’.
National Bank of Oman (NBO), Ahli Bank (ABO), Bank Dhofar (BD) and Bank Sohar (BS) have also been affirmed at Long-Term IDR ‘BBB-’. The outlooks on all the Long-Term IDRs are stable. Fitch believes Oman has the financial flexibility to support its banking system despite some weakening as a result of lower oil prices.
Fitch believes the Omani authorities’ willingness to support domestic banks remains high, partly because of high contagion risk (small number and high concentration of banks in the system) and the importance of the banking system in building the local economy.
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