Despite encouraging General Budget data and government announcements, which include supportive plans and figures that shall result in positive outlook and better confidence among investors, the cautious sentiment continued to dominate the market. This was likely due to investor interest for more results disclosures on one hand and speculative activities aiming for quick gains on the other. The MSM30 closed the week down by 0.34 per cent at 5,087.47. Sub-indices posted mixed performance, as the Service Index was the only gainer (+ 0.63 per cent) at 2,652.47 while both the Industrial Index and the Financial Index closed down by 0.71 per cent and 0.18 per cent respectively. The MSM Shariah Index closed down by 0.33 per cent.
The Phoenix Power Company SAOG disclosed its board of directors’ approval regarding cash dividend distribution of Baisas 3.0 per share, out of the retained earnings as per the audited financial statements for the financial year ended December 31, 2016. This will be eligible to the shareholders of the Company who are registered in the Company’s shareholders’ register with the Muscat Clearing & Depository Company SAOC as on January 18, 2018. Galfar Engineering and Contracting has been awarded a tender regarding “Operation & Maintenance of Salalah Waste Water System & Treated Effluent Supply Network “for Five years by Salalah Sanitary Drainage Services Co. SAOC. Total value is RO 12.98m. Data collected from the company disclosures on the MSM website indicates a total of RO 52.2 million worth of projects was awarded in 2017.
Total announced initial net earnings for 2017 so far as per U Capital database, MSM market and Bloomberg for the companies whose financial year-end in December stood at RO 33.4 million up by 5.1 per cent on annual basis supported by better results of the Financial sector on the back of higher net earnings posted by Nizwa Bank. The bank registered a net profit of RO 3.8 million for 2017 compared to only RO 0.11 million in 2016 on higher operating income and better control of operating expenses. Sector wise, total net earnings for the financial sector stood at RO 15.5 million for 2017, representing an annual increase of 41.9 per cent. The industrial sector and the Service sector net earnings has declined by 2.6 per cent and 14.9 per cent respectively. The drop in the Service Sector net earnings is largely due to one off deferred taxation impact due to increase in tax rate posted by Acwa Power Barka at RO 3.3 million. Excluding this one off item, total announced initial net earnings for the market would be RO 36.7 million, i.e. an annual increase of 15.5 per cent
Oman 2018 triple tranche bond is finally priced and as per Bloomberg Oman was able to secure better rate than the initial price guidance. 5-year bond whose guidance was 205bps over midswaps was priced at 190bps. 10-year bond whose guidance was 325bp over mid swaps was priced at 310bps and 30-year bond was priced at 395bps over midswaps compared with initial price target of 410bps over midswaps. The same tenor bonds last year were priced at midswaps plus 190bp area (5yr), Treasuries plus 300bp area (10yr) and Treasuries plus 387.5bp area for 30-year bond. As per budget statement of 2018, Oman is supposed to secure RO 2.1 billion of foreign funding and with successful raising of bond this year worth $6.5 billion (RO 2.5 billion), they were able to secure more than required and would not be needing any additional borrowing this year.
The Capital Market Authority (CMA) has issued detailed regulations for the creation of real estate investment funds in the Sultanate. The real estate investment funds will be available for public subscription in accordance with the regulations and the units to be traded on the MSM, the executive president of the CMA said.
Key points in the regulations include:
■ The minimum capital requirement for real estate investment funds is RO 10 million.
■ Funds that will be offered for public subscription and the special purpose vehicles, should distribute not less than 90 per cent of the annual profits to the holders of its units.
■ The funds would be exempted from taxes as per the income tax law
■ Funds will need to invest minimum 75 per cent of total assets in Oman, while founders will be allowed to invest up to 25 per cent of total assets abroad.
■ Real estate investment funds can be established as Shariah-compliant investment funds.
Oman attracted investments of RO 8 billion in 2017, Minister of Commerce Industry, told members of the Majlis Ash’shura. The figure is an increase of more than RO 800m compared to 2016. He also reiterated that businesses would be given permission to be set up sooner, adding that it would be a priority in the ongoing five-year plan. The minister said that great improvements had already been made in ease of doing business and that the same trend would continue.
Qatar Exchange topped the GCC financial markets gainers as it went up by 5.85 per cent only weekly basis while the Muscat Securities Market was the only loser with a decline of 0.34 per cent.
A heated race between GCC countries to attract foreign investments to their financial markets and other sectors began to accelerate. Saudi Arabia and Qatar announcements of simplified and developed measures to attract foreign investment were issued last week. Saudi Capital Market Authority has lowered the level of assets under management to $500 million from $1billion earlier. Adjustments also include qualifying the affiliates of QFIs or foreign portfolio managers and their managed funds without the need to submit separate applications and eliminating the requirement for the CMA’s review and approval of the QFIs’ qualification. The amended Rules, are effective as of January 23, 2018. According to the CMA statement, 118 foreign financial institutions registered as QFIs as of the end of 2017.
Qatar’s government approved a law which permits 100 per cent ownership for foreign investors in most sectors of the economy, which was previously restricted to 49 per cent. This move has been made in a bid to attract foreign capital to the Gulf State, as well as boost non-energy related revenue. While the law allows overseas investors to own 100 per cent of their businesses, they will not be allowed to purchase real estate or own franchises. Investing in banking and insurance still needs special government permission. The non-Qatari investors can import what they need for the investment, in addition to exempting the project from income tax in accordance with the procedures and regulation stipulated in the Income Tax Law. The market reacted positively to the news, and ended the week up by 5.85 per cent w-o-w.
Saudi Aramco legal status was changed to a joint-stock company as of January 17 according to royal decree and an official announcement from the government. The company has a fully paid capital of SAR60bn ($16 billion) divided into 200 billion ordinary shares. The firm’s board will have 11 members and the power to list the company in domestic and international markets. Furthermore, the government will remain the major shareholder of Aramco and retain the ultimate decision on output levels and production capacity. This step is ahead of the estimated listing of 5 per cent of the company in the stock market in 2018. Recent reports stated that the company has invited banks pitching for roles in its stock market listing.
— Courtesy: U-Capital
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