The MSM30 closed the week lower by 0.40 per cent on the back of a drop in the financial and industrial indices. Turnover and volumes were higher than last week by 9.0 per cent and 6.5 per cent, respectively.
All the sub-indices closed lower except Services. Industrial and Financial index were down by 0.77 per cent and 0.45 per cent, respectively while the Services Index closed up by 0.34 per cent. Shariah Index closed higher by 0.97 per cent w-o-w.
The Ministry of Tourism has asked tour and travel offices to prepare for the gradual return of the tourism sector in the country. Apart from following preventive measures suggested by the Supreme Committee on COVID-19 at the travel and tourism offices, the ministry said the operators must ensure that travelers have a medical certificate or required permits issued by the competent authorities while coming outside the Sultanate. All reservations shall preferably be made online and the use of paper documents or cash payments should be avoided. Health insurance will be mandatory for all tourists before completing the reservation procedures.
Moody's Investors Service downgraded the long-term local and foreign currency deposit ratings of seven Omani banks: Bank Muscat SAOG (Bank Muscat), HSBC Bank Oman SAOG (HBON), Bank Dhofar SAOG (Bank Dhofar), National Bank of Oman SAOG (NBO), Sohar International Bank SAOG (Sohar International), Oman Arab Bank (SAOC) (OAB) and Bank Nizwa SAOG (Bank Nizwa). Moody's changed the outlook to negative from ratings under review on the long-term deposit ratings of all seven banks. The primary driver for rating actions was attributed by Moody's to the government's weakening capacity to support the local banks, as indicated by the downgrade of the Government of Oman issuer rating to Ba3 with a negative outlook from Ba2 with ratings under review. A secondary driver of rating actions for Bank Muscat and HBON is the interlinkages between the sovereign's creditworthiness and the two banks' balance sheets, as the banks' strong standalone BCAs continue to be constrained at the level of the sovereign rating.
Ominvest disclosed that the transaction has been successfully concluded on 30th June. OAB has also completed its acquisition of Alizz Islamic Bank and the shares of Oman Arab Bank will be listed on MSM in due course.
Ahli Bank has entered into a strategic alliance with Dhofar Insurance Company. Under the partnership, Ahli Bank will offer its customers retail products of Dhofar Insurance Company including motor, travel, PA and others under its 'Bancassurance' portfolio.
Al Buraimi Hotel announced that, referring to the lawsuit filed by General Authority for the Capital Market against Al Buraimi Hotel Company, a ruling was issued by the Court of Appeal on 9th Jun 2020 to dissolve and liquidate this Company. The company's equity as of the latest is RO 2.97mn translating into book value per share of RO 0.834/share, compared to the current market price of RO 0.880/share.
Oman Euro Foods informed that it has received a letter from the Ministry of Finance to coordinate with Oman Arab Bank on repayment schedule and interest, without interest subsidy. Ministry of Finance has removed the guarantee on Oman Arab Bank government soft loan. Due to removal of interest subsidy there will be a financial impact on the company.
Oman Cement sector reported a net loss of RO 2.88mn in 1Q20 compared to profit of RO 1.72mn in 1Q19 and RO 2.49mn in 4Q19. Drop in sector income was largely because of loss reported by Raysut Cement. Raysut Cement reported loss was largely because of: Lower realization prices; Higher gas cost mainly due to increase in gas prices from January 1, 2020; Increase in fixed selling and distribution expense due to underutilization of hired ships due to COVID-19; Increase in finance cost due to higher amount of term loans and utilization of working capital facilities; and Reduction in fair value of securities.
Oman Cement reported a drop in earnings was largely reported by the company to:
- Net investment income of the company dropped to RO 69.6k compared to RO 0.609mn in 1Q19.
- As per the company, investment in securities was sold by the company in later part of 2019.
Overall revenue of the sector stood at RO 39.2mn in 1Q20 compared to RO 36.4mn in 1Q19, growth of 7.8 per cent. Gross margins of the sector dropped to 10.9 per cent in 1Q20 compared to 17.4 per cent in 1Q19.
[Courtesy: U-Capital]
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