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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

MSM30 index buoyed by 2020 State Budget

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The general index recorded good daily gains throughout the week, supported by an improvement in investment sentiment and the expansionary budget announcement.


The MSM30 Index closed the week up by 3.59 per cent w-o-w. All sub-indices closed up, led by the Financial Index which closed up by 4.80 per cent w-o-w, followed by the Services Index which closed up by 2.94 per cent w-o-w, and the Industrial Index which closed up by 2.82 per cent w-o-w. The MSM Shariah Index closed also closed up by 3.56 per cent w-o-w.


Alizz Islamic Bank announced that it received an offer letter from Oman Arab Bank for the potential merger between Alizz Islamic Bank and Oman Arab Bank. The offer proposes a SWAP ratio of around 81 per cent: 19 per cent for the shareholders of Oman Arab Bank (SAOC) and Alizz Islamic Bank (SAOG) respectively.


Doha based renowned group is investing heavily in one of the best potential sector of Oman i.e. Tourism. Bin Al Sheikh Holding Group, a well-diversified Qatari business conglomerate, was selected by Oman’s Ministry of Tourism to invest in a signature mixed use development with upscale tourist and leisure components on a beachfront stretch overlooking the Sea of Oman. An agreement to this effect was signed by Bin Al Sheikh Holding with the Omani government in May this year. Total investment in the venture, since branded as ‘Oman Gate’, was estimated at RO 120 million (QAR 1.2 billion) at the time. Bin Al Sheikh Holding Group has interests spanning real estate investment and development, building and contracting, hospitality, rebar manufacturing, aluminium and glass production, and safety and security services, among other sectors. The Group already owns a hotel venture in Salalah in the south of the Sultanate. Oman Gate is expected to launch during 2022 ahead of the start of the FIFA World Cup in Qatar.


The Ministry of Commerce and Industry implemented the Foreign Capital Investment Law issued under Royal Decree 50/2019, beginning, January 2, 2020. Foreign Capital Investment Law has many incentives and benefits:

■ The law allows the investor to establish a company in one of the permitted activities and own the entire capital of the company.


■ There is no limit on the capital for the companies established under this law.


■ It does not allow any fundamental changes in the investment project without the ministry’s approval.


Such a law will help in flow of capital for establishment of companies to execute big projects in the sultanate. It will help in improving the level of efficiency of operating companies and transfer of economic expertise and modern investment technologies. This will lead to the diversification of economy and have an overall positive impact.


Recent data about telecom subscribers revealed that total Internet subscribers continued to increase as they were up by 12 per cent till Nov’19 to 471.4k compared to end of 2018 at 423k. Total fixed telephones lines grew by 6.4 per cent to 595.5k as well as total mobile subscribers which declined by 2.3 per cent to 6.294 million. Active mobile broadband subscribers went up significantly in the month of November to close the period up by 15 per cent to 4.73 million subscribers in November 2019 compared to 4.11 million at the end of 2018.


Oman Education Sector 1Q-FY20 (Sept – Nov) profit rose by 47 per cent to RO 824.9k compared to RO 559.7k in the same period last year. Within the two companies, OETI witnessed higher growth in profitability despite drop in income by 6 per cent. Growth in net income resulted because of 17 per cent drop in expenses. Majan College profitability rose by 28 per cent on the back of growth in income by 1.8 per cent also supported by drop in expenses by 4 per cent.


The total value of property transactions in the Sultanate till the end of November 2019 increased by 4.3 per cent to reach RO 2,508 million from RO 2,406 million for the same period of 2018, as indicated by the preliminary statistics issued by National Centre for Statistics and information. Of the total traded value till the end of November 2019, RO 840.6 million worth transactions were sales contracts, while RO 1,646 million transactions were mortgage deals. The number of properties issued till the end of November 2019 were 192,892 which is a decline of 5.5 per cent from the same period last year.


Amongst the GCC markets, MSM30 was the best performer during the week up by 3.59 per cent while Dubai Financial Market posted the lowest gains (+0.15 per cent).


Locally, the expansionary 2020 budget provided an incentive for investment, especially in targeted sectors and projects, which we previously advised of attention to. We recommend investors to build (strategic) investment positions in these sectors and consider positively the measures intended to be taken in accordance with the budget statement in order to support the economy and to implement a realistic reading of the economy. The implementation the Foreign Capital Investment Law last week will also attract foreign investment in the coming period. (Courtesy: U-Capital)


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