MSM30 ends down on volatility

The MSM30 ended the week down by 0.57 per cent to 5006.62 on speculations and pressures arising from local institutional selling. However, the week also saw volatility in performance linked to companies’ disclosures especially about dividends, which formed a support point at that moment. The Financial sub Index was the only loser as it closed down by 1.21 per cent to 7404.87 while both the Service and Industrial indices closed up by 0.9 per cent and 0.22 per cent respectively. The MSM Shariah Index closed down by 0.36 per cent.
In the weekly technical analysis, The Muscat Securities Market (MSM) index is close to the 4,960 level as we mentioned last week, which is a strong support level. Breaking this level will lead the index to next level at 4,930 points. While closing the index above 5,000 points will support the index to reach the level of 5,060 points.
Till date, 22 companies have announced cash dividends for 2017. The total amount so far stands at RO 234.3m, up by 5.5 per cent on annual basis despite pressures on earnings. The dividend payout came at 53.3 per cent compared to 46 per cent for the same companies in the previous year. MSM and U Capital data shows that 7 companies have announced stock dividends with total value of RO 64.6m up by 28.9 per cent on annual basis for the same companies in 2016 taking into account that only 5 companies out of those companies have announced stock dividends in the previous year with value of RO 50.2m.
As per recent report issued by U Capital regarding expected cash and stock dividends for 2017, if it is assumed that most of the companies to maintain the same cash dividend payout paid for 2016 earnings for the year 2017 and adjusting for those which have already announced their proposed cash dividends, the total cash payout of the companies will amount to RO 366.5m i.e. dividend payout of 53.2 per cent on FY17 earnings. (profits attributed to companies’ financial year-ends in December). The report estimated that total of 776.3m shares to be distributed for year 2017 worth RO 77.8m, an increase of 12 per cent on annual basis.
All GCC financial markets closed down led by the Qatar Exchange which lost 3.41 per cent on weekly basis followed by Saudi Stock Exchange (-3.3 per cent)
MSCI is expected to announce the changes of its quarterly review this week and the changes would become effective by March 1, 2018. Any addition and deletion would result in a significant inflow/outflow in the effected companies.
(Courtesy: U-Capital)