Thursday, March 28, 2024 | Ramadan 17, 1445 H
broken clouds
weather
OMAN
23°C / 23°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

MSM index declines on selling pressure from foreign investors

1382920
1382920
minus
plus

The MSM 30 Index sustained its downward trajectory from last week, closing this week down on continued selling pressure from foreign investors. Foreigners sold about US$ 2.65 million worth of securities this week. Trading activity improved from last week with volume and turnover both rising on w-o-w basis, even though this week was only three working days due to the National Day holiday in Oman.


The MSM30 Index declined by 0.45 per cent w-o-w to 4,064.14. All sub-indices closed down except the Industrial Index which went up by 0.62 per cent. The Financial Index closed down by 1.27 per cent followed by the Services Index which closed down by 0.08 per cent. The MSM Shariah Index closed down by 0.52 per cent w-o-w.


n Voltamp recently published its 3Q19 financials and announced the followings:


n Voltamp reported net income of RO 102k in 3Q19 which was significantly higher than the comparable periods. However, the earnings were much lower than the quarterly income (RO 0.8 million average during 1Q16-4Q17) company used to make a couple of years ago.


n Company reported loss during 1Q18 and the numbers post that quarter never reached what they used to be before.


n Increasing competition, low local demand and lower yield on export orders were some of the main reason behind the dismal numbers.


n During 9M19, Company registered revenue of RO 29.3 million, higher by 3 per cent.


n Gross margins also slightly improved to 14 per cent from 12.3 per cent in same period last year.


n Future plan: The company has won orders both in Domestic and Export markets during the period. The company is making efforts to mitigate the risk of competition and it is making efforts to enter new markets in order to increase export sales at better margin.


The Government of Sultanate of Oman acting through the Ministry of Finance has mandated local Omani Banks as Issue Managers to establish an Omani Rial Sovereign Sukuk Programme and the launch of the first Sukuk issuance under the Programme. A 5-year and 7-year dual-tranche benchmark Sukuk is being offered to investors through a book-building process and will be open for subscription from November 25, 2019 to December 8, 2019. Minimum investment amount of RO 100,000 for each investor. So far no profit rate was announced on the Sukuk, however, if we take a cue from government development bonds, we believe it would be somewhere between 5.0-5.5 per cent.


The feasibility of selling a modest stake in Oman Oil and Orpic Group will be explored in a study planned in 2020 by the Ministry of Oil and Gas. The proposed 15-25 per cent stake sale would be explored once the landmark integration of Oman Oil Company and Orpic Group – a process that commenced just over a year ago – is consummated. As a first step, a “study” is proposed to be undertaken sometime next year to assess the viability of a stake sale either via an Initial Public Offering (IPO) or the sale of a minority shareholding to a “strategic partner”. The new Board has pledged to start making dividend payments to the government projected at a minimum of $1 billion per annum from 2029 onwards. Market capitalization of the Group is anticipated to rise to $30 billion by 2030.


Oman’s Ministry of Health is set to launch a first-of-its-kind endowment fund to help raise money to support the financing of public health care services in the Sultanate. The Health Care Endowment Fund is being positioned as a primary source of finance for the running of Oman’s public health care sector in the future. The Fund is proposed to eventually take over the financial burden of the Ministry, support the construction of hospitals, establish health care institutions at different levels, purchase hospital equipment and medicines, and support medical education and R&D in health care. It will also explore investments in health care related projects, such as pharmaceutical industries, private hospitals, and so on. With the recent Fed funds rate cuts, CBO’s policy rate (repos with CBO) has also eased over the last few months, reaching 2.224 per cent in Nov’19, down from 3.003 per cent in Jan’19. The rate has eased by about 79 bps on YTD basis.


Even the Rial Omani Overnight Domestic Interbank lending rate has declined for the first time in 2019, in August, by 3 bps.


The total revenues of Omani hotels in the three-to-five-star category rose by 8.0 per cent to RO 155.2 million till the end of Sept 2019 compared to RO 143.7 million for the same period of the previous year. However, hotel occupancy rates fell by 4.1 pps to reach 51.4 per cent at the end of Sept 2019 against 55.5 per cent for the same period of 2018, according to National Centre for Statistics and Information (NCSI). The total number of guests in Omani hotels showed a significant increase by 18.7 per cent in the nine-month period of 2019, reaching 1.25 million from 1.05 million guests for the same period of 2018. Among the nationalities, Europeans constituted the maximum number of visitors, reaching 398k. This was followed by 388k Omani guests and 158k Asian tourists till the end of September 2019.


Amongst the GCC markets, Kuwait Stock Exchange was the best performer during the week up by 2.47 per cent while the Saudi Market was the worst performing market down by 2.52 per cent.


(Courtesy: U Capital)


SHARE ARTICLE
arrow up
home icon