The MSM30 Index continued its decline from last week, even though market activity picked up, with increased turnover and volume on weekly basis. Selling pressure from Omanis was absorbed by foreigners, GCC and Arab investors. Foreigners were net buyers of about $2.48 million worth of securities last week. The MSM30 Index dropped 0.39 per cent this week to close at 3,989.61. Within the sub-indices, the Services Index dropped the most by 0.91 per cent w-o-w, followed by the Financial Index which dropped by 0.85 per cent and the Industrial Index which fell by 0.53 per cent w-o-w. The MSM Shariah Index, however, advanced by 0.40 per cent w-o-w.
A new bankruptcy law that will govern the conditions under which people in Oman can declare bankruptcy, and that will help them to come out of it quickly, will come into effect from July 1, 2020 onwards. The law passed by Royal Decree includes a set of rules and regulations pertaining to the above, as well as conditions for the bankrupt party to pay off his creditors, according to a restructuring plan that has been previously agreed upon.
The operation of Oman’s first Industrial City at Rusayl in Muscat Governorate will be placed in private hands under a Public Private Partnership (PPP) arrangement within two years, according to the head of the Public Establishment for Industrial Estates (Madayn). Rusayl Industrial City, the oldest of Madayn’s manufacturing hubs, is now fully leased out, having grown from an area of around 3 million sqm at inception to over 10 million sqm presently. Its growth has been fueled by its location within the capital city, its proximity to Muscat International Airport, as well as the sizable population clusters in its close vicinity. To help attract strong private partners, Madayn is offering attractive incentives, including concessions ranging from 10 – 99 years.
Omantel renegotiated lower interest rates and extended term on its existing syndicated loan facilities. The current loan which has an outstanding balance of $680 million (RO 262 million) had its term extended to October 2024 and secured an interest rate reduction of 35bps. The revised terms on the loans allows Omantel to reduce its finance costs and at the same time free up capital for investment in capital expenditure.
NCSI recently published public finance numbers for Jan-Aug period of this year. As per the available data:
n Deficit down 24.7 per cent during 8M19 to RO 1.38 billion compared to RO 1.83 billion in 8M18.
n Revenue was up 6.9 per cent supported by growth in income taxes and other revenue; oil and gas revenue rose by almost a per cent.
n Expenditure was almost flat supported by drop in civil ministries development expenditure and defense/security expenditure.
n As of August 2019, Government has additional surplus worth RO 527 million available to cover future deficit.
Gross electricity production in Oman during 6M19 stood at 17,915.5 GWH compared to 17,486.4 GWH during the same period last year. During the same period, net electricity production rose from 17,417.8 in 6M18 to 17,567.6 in 6M19. Al Batinah and Al Dhahirah contributed the most to the electricity production at 61 per cent (10,728.7 GWH) this year compared to 52.2 per cent last year. Al Sharqiyah ranked second in terms of contribution to the total at 20.2 per cent (3,553.7 GWH) followed by Dhofar at 10.3 per cent (1,813.6 GWH). Muscat net electricity production dropped the most by 67 per cent YoY during 6M19 to 646.9 GWH compared to 1,980.5 GWH in 6M18.
As of 9M19, 20 companies have reported losses. Total losses of those companies stand at RO 18.4 million in 9M19 compared to RO 32.23 million in 9M18, drop of 43 per cent. Of the 20 companies in losses, 16 reported losses in 3Q19 as well. Overall loss during 3Q19 stood at RO 9.27 million, higher on QoQ basis by 54 per cent while lower on YoY basis by 8 per cent. Omani Europe Food Industries and Oman Ceramics are the two companies which have reported losses during all quarters of 2018 as well as 2019.
Among the GCC markets, Saudi Arabia was the best performance up by 3.63 per cent while Qatar was the worst down by 0.48 per cent.
United Arab Emirates’ bank lobby is proposing limits on bank lending to the real estate sector to protect them from being overexposed to the sector. There is a draft paper for real estate lending with the UAE Banks Federation (UBF) and the banking sector which will review and give feedback to have a proper policy in lending cap for the real estate sector,” said United Arab Emirates Banks Federation. Real estate and construction credit to residents accounted for about 22 per cent of total at end of June 2019 compared to 17 per cent in Dec 2014. As of latest, the real estate and construction loans to residents stand at AED 336 billion, compared to AED 212.5 billion in Dec 2014.
Saudi credit facilities to Micro, Small and Medum Enterprises (MSMEs) have been gradually growing as the government is continously pushing the banks and finance companies to increase their loans to such companies. Total exposure to MSME’s which stood at 5.4 per cent as of 1Q18 now stands at 6.2 per cent as of June 2019. Exposure of the banks have risen from 5.1 per cent in 1Q18 to 5.9 per cent as of June 2019 while the exposure of financing companies to MSMEs has risen from 15.9 per cent as of 1Q18 to 16.6 per cent as of June 2019. (Courtesy: U-Capital)
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