MSM ends positive amid heavy trading in blue chips

Despite lower trading compared to the previous week, MSM ended last week up amid buying in blue chips stocks (Top 4 blue chips recorded approximately 60 per cent of the total value traded). Foreigners were net buyers during the week with net inflows of $1.2 million.

MSM30 closed the week up by 1.56 per cent. Similarly, all sub-indices ended positive led by the Financial Index (1.39 per cent) followed by the Industrial Index (0.90 per cent) then the Services Index (up by 0.56 per cent on weekly basis). The MSM Shariah Index closed up by 1.25 per cent w-o-w.

Bank Dhofar, which earlier announced details of its right issue, further announced that the record date for the right issue will be November 11, 2018. Holders of every 100 shares of the bank shall be entitled to be offered 14.84 right shares of the bank duly rounded off to the nearest number. The subscription for the right issue shall begin on November 20, 2018 and end on December 4, 2018. Trading in right shares will begin on November 18 and end on November 29. Earlier, Bank Dhofar approved an issue price of 152 baisas per share (consisting of a nominal value of 100 baisas, a premium of 50 baisas, plus issue expenses of 2 baisas) for the Rights shares of ordinary shares.

A multi-source project financing of $4.61 billion was signed for the 230,000 barrels per day (bpd) Duqm Refinery Project. The Duqm Refinery Project is a joint venture between Kuwait Petroleum International and the Oman Oil Company and is located in the Special Economic Zone in Duqm (Sezad) along the south east coast of the Sultanate. These facilities provided by 29 reputed financial institutions from 13 countries are a testament to the confidence placed by international, regional, and local lenders in the Sultanate. In the weekly technical analysis, The MSM30 index is very near to cross up the level of our resistance at 4,500 points (we mentioned before). Currently MSM 30 index is above the 50-day moving average. The index will move towards 4,540 points if MSM30 index closed above 4,500 points.

Oman Arab Bank announced that it has successfully closed unsecured perpetual subordinated bonds valued at RO 42.55 million as Additional Tier 1 Capital, with an issue price of RO 1.000 per bond, comprising the nominal value, and an interest rate of 7.5 per cent/annum. The bank issued the bonds at a value of RO 35 million with a green shoe option of RO 15 million and was managed by Ubhar Capital (U Capital), who acted as the financial adviser, issue manager, and lead arranger. The bank reported net profit of RO 21.27 million for 9M18 and assets of RO 2.28 billion.

Shariah compliant companies in Oman reported an income growth of 3 per cent during 3Q18 on a QoQ basis, however the same on a YoY basis declined by 22 per cent. Out of 31 Shariah companies at MSM, 25 companies’ year ends in December. They reported net income of RO 20.87 million during 3Q18 compared to RO 20.25 million in 2Q17 and RO 26.8 million in 3Q17. Major reason for the drop in earnings on a YoY basis despite amazing performance of Islamic Banks was because of drop in earnings of both cement companies (Raysut and Oman Cement), Port Services and shell Oman Marketing. Earnings of Islamic financial services companies i.e. banks and takaful companies rose by 318 per cent during 9M18 to RO 9.76 million compared to RO 2.33 million during 9M17.

The rate of inflation in the Sultanate of Oman in September 2018 increased by 0.78 per cent compared to the same month of 2017, according to the latest data released by the Centre on consumer price indices. The rise in the price index in September 2018 compared to the same month in 2017 was because of rise in prices in major groups such as housing, water, electricity, gas and other fuels by 0.59 per cent, transport by 5.67 per cent, restaurants and hotels by 0.63 per cent, miscellaneous items and services by 0.87 per cent and education by 4.9 per cent. Among governorates, Dhofar had the highest rate of increase in inflation by 1.79 per cent, followed by Al Batinah North Governorate by 1.75 per cent, Al Dakhiliyah Governorate by 0.72 per cent, Muscat Governorate by 0.54 per cent and Al Dhahirah Governorate by 0.13 per cent.

Abu Dhabi exchange led the gainers within GCC region posting weekly gain of 2.2 per cent followed by Oman at 1.56 per cent while Saudi Arabia was the biggest loser closing down by 1.68 per cent.

GCC petrochemical companies announced third quarter results for the year 2018. Overall the sector reported an earnings growth of 21 per cent to $3.0bn in 3Q’18 compared to $2.52 billion in the same period last year. Sector results were largely aided by increase in average benchmark oil prices which were up 46 per cent YoY during 3Q18 to $75.8/bbl. Compared to $52.1/bbl in 3Q17. SABIC alone amounted to 53 per cent of the total earnings of the sector followed by Industries Qatar at 12 per cent and YANSAB at 6 per cent.

A law allowing 100 per cent foreign ownership of companies in the UAE is now in force after being published in the country’s Official Gazette. However certain sectors are still restricted from 100 per cent foreign ownership and appear on a ‘negative list’, they include: Oil exploration and production, investigation, security & military, banking, finance and insurance activities, water and electricity provision, post, telecommunication and other audio visual services, fishing and related services, road and air transport, printing and publishing, and a few others. (Courtesy: U-Capital)