Market ends on positive note

A state of caution dominated trading in the market ahead of the quarterly corporate earnings season, which in turn had an impact on trading values. Overall, the market was under pressure from individual and foreign institutional investors. MSM 30 went up by 0.04 per cent on weekly basis. Financial and Services Index closed up by 1.04 per cent and 0.32 per cent, respectively. However, the Industrial Index went down by 0.22 per cent. The MSM Shariah Index closed up by 0.43 per cent.

Ominvest (regarding its subsidiary Oman Arab Bank) and Alizz Islamic Bank last week announced that further to their disclosure on May 24, 2018, Oman Arab Bank and Alizz Islamic Bank signed a Memorandum of Understanding (MoU) on October 4, 2018 for a potential merger between the two entities after obtaining the in-principal approval from the regulatory bodies. The MoU contains the broad framework of the merger. It has also been agreed that Alizz Islamic Bank will continue to operate as a dedicated Islamic banking franchise of the merged entity and will maintain management autonomy ensuring that there will be no negative impact on existing customers or stakeholders. The combined entity’s total assets as of latest financials stand at RO 2.92 billion.

In the weekly technical analysis, we will keep our last recommendation that mentioned closing MSM index above the level of 4,500 points will push the index to reach 4,570 points supported by weekly and daily “RSI”. While broken the level of (4,500 points) will push the index to the level of 4,460 points.

September 18 saw the best monthly performance during this year related to the MSM 30 backed by a build-up of investment positions in lead shares, presence of local institutions and increasing confidence on better macros and oil prices. The benchmark went up by 2.82 per cent on monthly basis.

The average daily turnover stood at RO 2.44 million, down by 41.5 per cent on yearly basis (RO 4.1 million for September ’17). The index during September 2017 was up by 1.68 per cent.

The 9M’18 analysis showed that MSM 30 went down by 10.9 per cent YTD. The average daily turnover came at RO 3.4mn, down by 7.5 per cent, while the average daily volumes went up by 2.8 per cent to 17.7 million shares. Within the same period, local investments (institutional and individuals) were net buyers with total net buy of RO 157.8 million absorbing pressures from all other categories especially the foreign institutional investments.

In other macro news: According to recent data published by NCSI, the number of visitors to Oman reached 3.25 million at the end of 2017, posting a CAGR of 14.1 per cent during 2013-17. GCC visitors form 46.7 per cent of the total, followed by Asians (21.2 per cent) then Europeans (20 per cent). The dominant reason for visiting is related to visiting relatives and friends which forms 40.5 per cent of the total type of visitors.

Visitors expenditure increased by more than half over 2013-2017 to RO 342.3 million in 2017 of which 40 per cent on average was spent by the Europeans followed by GCC (26.5 per cent) then Asians (15.3 per cent).

Foreign Direct Investment (FDI) in Oman at the end of the second quarter of 2018 stood at RO 9.7 billion, recording a growth of RO 1.4 billion from the second quarter of last year, according to data issued by the NCSI.

The UK topped the list of countries with FDI in the Sultanate until the end of the second quarter of 2018, reaching RO 4.7 billion, compared to RO 3.7 billion in the same period of 2017. This was followed by the UAE and Kuwait, with RO 1.0 billion and RO 425.9 million, respectively.

Furthermore, FDI from Qatar and Bahrain until the end of the second quarter of 2018 stood at RO 390.2 million and RO 344.8 million, compared to RO 381.9 million and RO 333.9 million in 2017, respectively, according to NCSI. Oil and gas sector accounted for the bulk of FDI at the end of the second quarter of 2018, reaching RO 5.5 billion, followed by financial brokerage at RO 1.4 billion. FDI in the manufacturing sector reached RO 1.07 billion, real estate sector, including renting and business activities, stood at RO 675.5 million, and other activities accounted for RO 1.06 billion.

Saudi Stock Exchange topped the gainers of the week amongst regional indices with weekly gain of 1.28 per cent while Bahrain Bourse was the worst performer closing down by 1.75 per cent.

Saudi Government issued preliminary estimates of its budgets for upcoming years. Preliminary estimates indicate that the total revenue to reach SAR 978 billion in 2019, an increase of 11 per cent compared to the 2018. Total revenues as a percentage of GDP is expected to reach 31 per cent in 2019.

UAE announced last week that it would begin refunding billions of dirhams of bank-guarantees paid by private sector firms when they recruit workers. As reported in media, UAE’s cabinet approved a decision last week to abolish the mandatory deposit of AED 3,000 ($817) private sector firms must pay when they hire employees. It is being replaced with a new insurance scheme that costs companies AED 60 ($16) annually per employee. UAE Vice-President and Prime Minister said that the change would allow businesses to recover approximately AED 14 billion ($3.81 billion) in guarantees already paid out. The refunding to businesses will begin from the middle of October.

[Courtesy: U Capital]