Market pick-up supported by services sector

The MSM was higher on week-on-week basis supported by higher volumes as well as turnover compared to the previous week. This week, Arab investors (ex-GCC) were net buyers while all others were net sellers. The MSM30 Index ended the week higher by 0.56 per cent at 4,020.16. The Services Index rose by 3.27 per cent, Financial Index rose by 1.09 per cent while the Industrial Index closed down by 1.03 per cent. The Shariah Index closed up by 1.06 per cent.
National Gas announced that the Company has been in discussions with third parties potentially interested in investing in the Indian Subsidiary for partnering in the Project by acquiring up to 40 per cent of the share capital of the Indian Subsidiary. The Company has been in serious discussions in respect of the participation in the proposed Indian Subsidiary with Petredec, a conglomerate engaged in trade, transportation, storage, and distribution of liquefied petroleum gas (LPG). Accordingly, the Company and Petredec after various deliberations and several rounds of negotiations have entered into definitive agreements on September 8, 2019. Accordingly, out of the total $22m of the equity required to be infused, Petredec (through its subsidiary Petredec India Holdings Pte Ltd) will subscribe to 40 per cent (i.e. $8.8m) of the equity share capital in the Indian subsidiary.
Oman Ceramics Company in its EGM resolved to take the appropriate measures as per the proposal suggested by the board of directors to return the company’s capital to what it was before the losses suffered by the Company. Accumulated losses of the Company as of 1H-2019 stand at RO 1.49m and the share capital stands at RO 1.89m.
Galfar Engineering received four additional contract awards in last 3-4 weeks. During the period January 2019 until June 30, 2019, the Parent Company received new orders worth RO 117m. The order book as of 1H19 was RO 423m. YTD the parent company has received new orders worth RO 135m. The Parent Company has certified overdue receivables of more than RO 38m as of 1H-19 from the government and its related entities. The delay in receiving the overdue receivable has caused a strain on its cash flow, which resulted in suboptimal execution of certain projects and delay in completion of certain projects. Going forward, Company expects to maintain a solid work pipeline with a significant number of tenders under evaluation across a diverse array of sectors and clients.
The State General Reserve Fund (SGRF) recently issued its Annual Report for the year 2018 and disclosed the following: Fund managed average annual return of about 7 per cent since inception; The fund managed to recover capitals and exit from 6 different investments, yielding returns of about 2.6x times the investment value; The Fund added 16 new investments in 2018; As part of the efforts to privatise some government services and to boost the national economy, the government is in the process of transferring the ownership of Muscat Securities Market to SGRF in order to convert it into a public listed company for future public offering.
The new fixed income strategy focuses on US corporate bonds and the investments in developing countries, by reallocating the same away from global treasury bonds.
The Oman government reported budget deficit of RO 661m in 6M-2019 (before means of financing) compared to RO 1,405m in 6M-2018. Revenue during the period jumped by 11 per cent to RO 5.51bn compared to RO 4.94bn in the same period last year. Higher revenue was largely because of increase in oil/gas revenue and hike in revenue from corporate income tax and other segment. Expenditure on the other hand dropped by 2.8 per cent to RO 6.17bn compared to RO 6.35bn last year. Drop in expenditure was reported because of decline investment and current expenditure. Government withdrew RO 400m from reserves to fund the deficit.
SMEs continue to surge in Oman, as government continues to ‎support the sector. SMEs in Oman have grown from 23,221 in ‎December 2016 to 40,326 at the end of July 2019, majority of which are located in Muscat Governorate at 36 per cent, followed by ‎‎17 per cent in Al Batinah North and 8 per cent in Al Batinah South and Al ‎Sharqiyah South, with the remaining 31 per cent distributed across other ‎governorates in the country.
Among GCC markets, Qatar topped the gainers up by 2.03 per cent while Kuwait Bourse dropped the most by 3.52 per cent on a weekly basis.

 (Courtesy: U-Capital)