MSM ends in red with overall market activity remaining thin

Overall market activity remained thin as cautious sentiment continues to dominate. Further, some selling pressures were seen despite positive movements by the CMA and encouraging data at macro level which should support investors’ confidence. Local individuals and foreigners were net sellers during the week with net sell of RO 0.53m. MSM30 closed the week down by 0.91 per cent. Similarly, all sub-indices ended negative led by the Industrial Index (1.1 per cent) followed by the Financial Index (1.02 per cent) and then the Services Index which closed down by 0.89 per cent on weekly basis. The MSM Shariah Index also closed down by 0.56 per cent w-o-w.
CMA suspended one of the international audit firms from auditing entities regulated by CMA for a period of one year. The suspension was result of CMA’s inspection of some listed entities where major financial and accounting irregularities were discovered by CMA team. This prompted CMA to enforce immediate corrective measures in those listed entities to protect investors and other stakeholders. Such actions shows how prudent are the regulators in Oman to protect the interest of investors.
MSM issued its updated list regarding companies for Day Trade. The list to be effective as from December 2. The list which includes 30 stocks covers most of the leading shares including banks, telecom, Ominvest, Galfar in addition to some power and investment companies.
National Gas Co said that its Indian subsidiary, NGC Energy India Private Limited has entered into a definitive agreement with Krishnapatnam Port Co Limited to setup an LPG import and storage terminal at the port in India. The company has operations in Malaysia, the UAE and plans to start working in Saudi Market.
Al Anwar Holdings SAOG said that it has not received the regulatory approval from the CMA to complete the transaction related to its stake divestment of 28.92 per cent in National Biscuits Ind SAOG (Nabil). Thus, the deal cannot be executed at this time. Earlier in April, Al Anwar Holdings posted on the MSM that it is in a process of entering into a binding Share Purchase and Sale Agreement (SSPA) with a potential buyer for sale of 289,197 shares (28.92 per cent stake) of National Biscuits Ind Ltd SAOG (Nabil) at RO 5.632 per share, with total cash consideration value of RO 1.629m. The company estimated a positive impact on its Profit and Loss Account of around RO 144K.
ACWA power which earlier announced the technical fault because of gas turbine 2 will result in financial impact of RO 1m, announced last week that gas turbine 1 also tripped and the financial impact because of it will be RO 2m. The company said that it has informed the insurers about the second incident and a loss adjustor to be appointed accordingly as per the disclosure.
In the weekly technical analysis, we will keep our last recommendation that MSM30 index is above the 50-day moving average and the index will move towards 4,540 points if MSM30 index closed above 4,500 points. Currently the index has a support level at 4,440 points.
Total debts of the companies, which announced their full 9M’18 results within the Industrial sector, have touched RO 403.1m, up slightly by 0.6 per cent YTD despite increase of debt by Al Jazeera Steel Products Co and National Aluminium Products Co (both of them added RO 17.8m during 9M’18).
This happened due to the notable reduction of debts of Galfar and Oman Cement. Galfar Engineering and Contracting Co debt formed 38 per cent of the total listed industrial companies followed by Oman Chlorine (11.6 per cent). The data showed that Galfar saw the highest drop in total debts in terms of value, from RO 175.4m at end of 2017 to RO 153.32m by 9M’18, i.e. RO 22m. Looking at debts to assets ratio, the announced debts within the Industrial sector represent 24.9 per cent of total assets versus 24.8 per cent as end of 2017. The following chart ranks top 10 companies according to their debt to asset ratio as of 9M’18.
Omantel announced results in the previous week. At group level, Omantel revenue in 3Q’18 was RO 632.5m, notably higher on quarterly basis as it consolidated Zain KSA for the first time. The net profit attributable to Shareholders of the parent company for the quarter stood at RO 20.6m. On 9M’18 basis, the group revenue came at RO 1.54bn including Zain group and Zain KSA consolidation. The company said that the interest cost related to Zain acquisition is RO 43.7m for 9M’18 and received a dividend income of RO 42.6m. On the other hand, Omantel Group (excluding Zain) and including the SPVs (Oztel) and domestic subsidiaries have achieved net profit attributable to the parent company of RO 68.15m, up by 8.6 per cent on yearly basis for 9M’18.