MSM rises on support from GCC and foreign investors

The MSM 30 Index closed the week up on support from GCC and foreign investors. Selling pressure from Omani and Arab investors was absorbed by the GCC and foreign investors. In spite of this week being a 4-day week, value traded declined on w-o-w basis only marginally.

The MSM30 Index continued on upward trajectory from the previous week, and rose by 1.07 per cent this week to close at 4,083.94. The Services Index advanced the most by 1.23 per cent w-o-w, followed by the Industrial Index which rose by 0.75 per cent w-o-w. The Financial Index declined by 0.22 per cent w-o-w. The MSM Shariah Index closed up by 0.62 per cent w-o-w.

Musandam Power Company (MPC) announced the successful close of Phase I of its IPO for listing on the Muscat Securities Market. Based on the price discovery process completed through book building by large and institutional investors, the allotment price for shares has been determined at 316 baisas. In Phase I of the IPO, the Offer was oversubscribed by 5.6 times of Phase I offer shares. Phase II of the IPO, where shares would be offered to retail investors at the price of 316 baisas has started and will end on November 21 and the allotment by November 26.

National Gas Company Oman SAOG (NGC), in partnership with Singapore-headquartered Petredec, has broken ground on an LPG import and storage terminal at Krishnapatnam port in the south eastern part of India. The project, valued at around RO 21.6m will be set up under a joint venture in India, NGC Energy India Pvt Ltd, in which NGC will have a 60 per cent stake, while Petredec, will hold the remaining 40 per cent . The project is expected to take 15-18 months for completion after securing all approvals. The refrigerated LPG import and storage terminal will have a storage capacity of 30,000 tonnes and a throughput capacity of 1.4m tonnes per annum.

Oman Chlorine announced that it has been awarded a contract by Haya Water for supply of chemicals with contract value of RO 1.77m for a period of five years.

Renaissance Services announced the successful repurchase/redemption of 100 per cent of its dual currency Step-Up Subordinated Perpetual Notes (‘P Notes’) of $125.5m (RO 48.3m) issued by its wholly owned foreign subsidiary Renaissance International Limited. Repurchase of the perpetual was already notified by the company in previous briefings. Repurchase would reduce the interest expense of the Company and consequently result in higher income.

The board of Renaissance Services SAOG, in a board meeting also proposed and recommended to shareholders the approval of a restructuring of the Company’s issued and paid up share capital from RO 36.7m to RO 23.6m, through a proportionate cancellation of shares. The proposed capital restructuring scheme will help to eliminate the company’s accumulated losses, resulting in a stronger balance sheet which will enable the Company to pay dividends to shareholders in the future.

Gulf Investment Services has accepted the subsidiary company’s i.e. Gulf Baader Capital Market decision taken in its board meeting to reduce its capital from RO 7m to RO 2m.

An analysis of Oman’s leasing sector reveals that gross finance asset growth has slowed down to 0.6 per cent YoY as at the end of 9M’19, with total gross finance assets at RO 1.22bn. Working capital finance has grown to RO 100.5m, up 1.5 per cent YoY. Net finance assets have declined by 2.7 per cent YoY to RO 1.03bn, as higher provisions bite. Non-performing assets of the sector remain high at RO 175.4m, or 15.6 per cent of gross finance assets.

Within the sector, Taageer Finance (TFCI) has flouted the sector-wide decline in net finance income, posting an 18.6 per cent YoY growth for 9M’19. National Finance (NFCI) was a distant second-best with a 0.2 per cent YoY rise in net finance income for 9M’19. The remaining three listed leasing companies (United Finance (UFCI), Al Omaniya Financial Services (AOFS) and Muscat Finance (MFCI)) posted declines in their net finance incomes for the first 9 months of 2019, as higher cost of funding weighs down their finance margin.

The inflation rate in the Sultanate, measured by movement in the average Consumer Price Index (CPI), fell by 0.15 per cent in October 2019 compared to the same month in 2018, according to NCSI. The prices of housing, water, electricity, gas, and other fuels fell by 0.3 per cent, transport by 2.48 per cent, communication by 0.3 per cent; and miscellaneous goods and services by 3.69 per cent in October 2019 compared to the same month of the previous year. [Courtesy: U Capital]