MSM ends the week up despite lower volumes and turnover

The MSM 30 Index closed the week up by 0.12 per cent despite lower volume and turnover as compared to the previous week. Shariah index was down by 0.07 per cent. The turnover and volumes were lower than last week by 61 per cent each. Foreigners continued to remain net sellers last week as well. Omanis and GCC investors were net buyers of $1.73mn worth of securities.

Oman’s real estate activity has dropped as the value of real estate exchange by the end of Jun’20 stood at RO1.05bn, compared to RO1.24bn by the end of Jun’19, according to statistics released by the National Centre of Statistics and Information (NCSI). The data shows that fees collected from all legal transactions dropped 33.1 per cent YoY and the exchanged value of 21,473 sale contracts declined by 27.3 per cent YoY to RO354mn in Jun’20. The value of mortgage contracts also dropped by 13.2 per cent YoY to RO 651.7mn.

The Ministry of Finance has issued a circular on the rules for preparing the state’s general budget estimates for 2021. The foundations will include, among others, the following: Budget allocations should be in accordance with the financial framework of the tenth five-year plan (2021-2025); Determining the budget ceiling for each agency, so that it does not exceed the amended budget in the year 2020; Continuing to implement procedures aimed at rationalizing spending and raising its efficiency; Controlling the deficit and maintaining its downward course; Searching for innovative financing methods to finance some government projects and services; and Enhancing the partnership between the public and private sectors in a manner that enables accelerating the implementation of projects without disturbing financial balances at the macroeconomic level.

As per the CBO’s latest bulletin, conventional credit growth in Oman has slightly improved to 2.4 per centYoY in May as compared to 2.2 per cent YoY in Apr’20. Total conventional ‎credit reached RO 22.46bn as at the end of May (+RO 143mn on MoM basis or +0.6 per centMoM; YTD: +2.7 per cent). ‎Conventional credit improved largely because of a 0.6 per centMoM expansion in private sector credit, which forms about 86 per cent ‎of the total. Furthermore, credit to government and non-residents also improved by about 6 per cent and 1 per cent respectively. ‎ Conventional deposit growth also picked up to 5.7 per centYoY in May’20 as compared to 2.9 per centYoY in Apr’20 and 4.1 per centYoY in Mar’20. ‎Total conventional deposits stood at RO 20.5bn (+RO 91mn on MoM basis or +0.4 per centMoM; YTD: 4.1 per cent). ‎ Sector Loan-to-deposit (LTD) ratio increased to 109.5 per cent in May‘20 vs. 109.3 per cent in Apr’20.  Conventional deposits improved largely because of a +1 per centMoM (+RO 113mn) and 5.1 per centYoY increase in Government & ‎public enterprises’ deposits. ‎ The share of Government & Public Enterprises deposits is stable above 30 per cent in May’20. Private sector deposits, which ‎account for about 68 per cent of total conventional deposits, dropped by 0.1 per centMoM and grew by 8.7 per centYoY. ‎

Islamic Bank financing (Banks & Islamic Windows) reached RO 4.08bn (+0.1 per centMoM and +9.8 per centYoY, YTD: +2.8 per cent).‎ Islamic financing stands at 15.4 per cent of total Oman banking credit, and Islamic deposits form 14.4 per cent of total bank deposits.‎ Islamic deposits reached RO 3.57bn (1.1 per centMoM and +5.8 per centYoY; YTD: +12.4 per cent).‎ Financing-to-deposit ratio stood at 115.5 per cent.‎

Oman banking sector’s total credit stood at RO 26.54bn (+0.6 per centMoM and +3.3 per centYoY; YTD: +2.7 per cent). Total deposits stood at RO 24.08bn (+0.5 per centMoM and +5.7 per centYoY; YTD: +2.1 per cent). Total private sector credit stood at RO 23.15bn, (+0.5 per centMoM and +2.6 per centYoY; YTD: +2.1 per cent). Loan-to-deposit ratio stood at 110.2 per cent vs. 109.2 per cent in Dec’19.

Furthermore, CBO’s foreign assets as at the end of May’20 stood at RO 6.86bn, having increased by 10.7 per centYoY and 7.8 per centMoM or RO 494mn in May’20. The MoM increase is brought on by a 16.1 per centMoM rise in placements abroad (which account for half of the total foreign assets), a 0.1 per centMoM increase in securities held (48 per cent of total), 11 per centMoM increase in RO reserve assets and 20 per centMoM increase in bullion. CBO’s foreign assets are above the trailing 12-month simple average of RO 6.36bn. These assets include bullion, IMF reserve assets, placements abroad and foreign securities.

[Courtesy: U-Capital]

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