Foreign inflows buoy MSM Index

MSM30 closed the week higher by 3.31 per cent. Despite two-day trading week, the turnover was higher than last week.  Foreigners were net buyers of approximately $4.9mn.

All the sub-indices closed higher as well. The financial index was up by 3.38 per cent, Services Index was up by 2.88 per cent while the Industrial index was up by 0.76 per cent. Shariah Index also closed up by 1.21 per cent during the week.

As expected, almost all utility companies announced that Oman Power and Water Procurement Company (OPWP) will continue to pay the investment charge for all the valid invoices. The reversal of the decision is an encouraging sign over how closely the government is safeguarding the interests of the investors.

Oman Cement announced that bids are due in by mid-July for two key tenders linked to the establishment of a new integrated cement plant in the Special Economic Zone (SEZ) at Duqm in Oman’s Wusta Governorate. The client is Al Sahawa Cement Company (ASCC), a subsidiary of Oman Cement Company, the Sultanate’s first cement manufacturer. Total investment in the cement mill is estimated at $212mn. At its heart is a 5,000 tons per day (tpd) clinker production unit, a contract for which is proposed to be awarded on an Engineering – Procurement – Construction (EPC) basis.

The Central Bank of Oman (CBO) issued the first license to non-bank financial entities (fintech companies) in favor of Thawani Technologies for complying with all regulatory requirements. The license is a fundamental step towards achieving Oman’s vision to nurture and enable Fintech companies to offer acceptable, affordable, accessible and available services to the nation.

Oman’s total banking assets (Conventional as well as Islamic) grew by 0.3 per cent in Mar’20 on year-to-date (YTD) basis. The assets have grown at a compounded average growth rate (CAGR) of 7.4 per cent since 2013 until 2019. As at the end of Mar’20, total credit has grown by 2.2 per cent since Dec’19, reaching RO 26.40bn, and total deposits have grown by 2.0 per cent (YTD) reaching RO 24.14bn. The loan-to-deposit (LTD) ratio stood at about 109 per cent, roughly stable from Dec’19.

The latest CBO data for conventional banks indicates that the weighted average Oman Rial interest rate spread (calculated as lending rate minus deposit rate) widened by 8.5bps on year-on year basis (YoY), at 3.543 per cent during the month of Mar’20, as the YoY growth in deposit rate lagged behind the YoY growth in lending rate. On month-on-month (MoM) basis, the spread improved by 1.5bps as deposit rate contraction (-4.5bps) outpaced lending rate decline (-3.0bps). The weighted average deposit rate on RO deposits dropped to 1.936 per cent from the peak of 2.089 per cent (since March 2010) witnessed in Jan’20. Weighted average FCY spread softened by 9bps on month-on-month (MoM) basis during Mar’20 to 2.73 per cent. The FCY spread is lower by 103.4bps when compared to that recorded in Mar’19. Weighted average interest rate on private sector RO time deposits contracted by 4.6bps MoM in Mar’20 and expanded by 19.5bps YoY, to 3.981 per cent. Weighted average interest rate on all private sector deposits (RO), rose to 1.511 per cent (+2.1bps MoM and +13.7bps YoY).

[Courtesy: U-Capital]

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