MSM top GCC performer buoyed by revived investor sentiment

The MSM Market’s primary index rose on each day of the past week (like the previous working week), primarily supported by the financial and services index. Last week, Omanis were net buyers of about $2.11 million worth of securities and absorbed the selling pressure seen from the GCC investors. The MSM30 Index ended the week up by 3.27 per cent at 3,987.65. The Financial and Services Index also rose by 4.51 per cent and 1.46 per cent respectively. The Industrial Index, however, closed down by 0.34 per cent. The Shariah Index also closed up by 1.90 per cent.
As per the CBO’s recently published annual report for 2018, Oman’s medium-term economic outlook robust, as the Sultanate can continue to bank on its thriving non-oil sectors to drive economic growth over the medium term, aided by a flurry of new enabling policy actions and a brightening business environment.
Oman has recently completed issuance of $3 billion international bonds, receiving orders to the tune of $14 billion in a low-yield environment. The proceeds from the debt raising will enable the Sultanate to meet a significant portion of its expected funding needs for the year. Oman issued $750m in five year and $2.25 billion in 10-year bonds. The Sultanate’s adviser on the issuance stated that investors made orders worth nearly $14 billion for papers offered at a final yield of 4.95 per cent for the long 5-year bonds, due in February 2025 and 6pc for the 10-year notes.
Galfar Engineering announced two project awards during the week. One is a subcontract worth $16 million for Ras Markaz Crude Oil Park Project (Phase 1) by China Petroleum Pipeline Engineering Co ‎Ltd (Oman Branch). The contract effective date is August 20, 2019, and the completion date is ‎March 30, 2020. The company said that it expects a reasonable income from this contract.‎ Second is a contract on “Civil Works and services related to the 4th Ball Mill (Wet Grinding) ‎by Vale vide their letter of award dated 8th July 2019, for the sum of $2.38 million.” The stock closed the week down by 1.22pc. ‎
A new investment law in Oman will be effective from January 2020‎. The introduction of this law comes as a move to ensure the stability of foreign investment in the Sultanate.‎ The new Foreign Capital Investment Law will apply to all non-Omanis who want to establish a project that is economically ‎feasible for the Sultanate, for which they would use their own capital and assets.‎ It allows the investor to establish a company in one of the permitted activities, enabling them to own all of the capital.
As per the CBO’s latest statistical bulletin, the total credit of the Omani Banking sector (conventional loans and Islamic financing) stood at RO 25.7 billion as at the end of Jun’19, up by 5.9 per cent YoY and flat on MoM basis. Total deposits stood at RO ‎‎23.05 billion, up by 3.2 per cent YoY and up by 1.2 per cent MoM. Total Loan-to-Deposit Ratio eased slightly to 111.5 per cent vs. 112.8 per cent a month ago. Conventional banks account for 85.1 per cent of total system credit at RO 21.88 billion as at the end of Jun’19, rising by 4.5 per cent YoY but contracting by 0.3 per cent MoM. Credit extended to the private sector remained stable on MoM basis and grew by 1.9 per cent YoY. Conventional deposits at RO 19.74 billion (+2.9pc YoY, +1.7 per cent MoM) form 85.6 per cent of the total banking deposits of Oman. Conventional Loan-to-Deposit ratio stood at 110.8pc, down from 113.0pc a month ago. Islamic credit stood at RO 3.82 billion (+15.0 per cent YoY, +1.9 per cent MoM) and Islamic deposits stood at RO 3.31 billion (+4.9 per cent YoY, -1.9pc MoM), with Loan-to-Deposit ratio stretching to 115.6pc in Jun’19 from 111.2 per cent a month ago.
(Courtesy: U-Capital)