The performance of the previous week was mixed as the financial results of the companies varied and investors responded to the results accordingly creating varied movements. It was also noticed that there were speculations and presence of foreign and GCC institutional investment, in addition to the changing of their investment positions. The MSM30 ended the week down by 0.09 per cent at 3,980.29. The Services Index was the only gainer, closing up by 2.25 per cent while the Industrial Index closed down by 0.92 per cent and the Financial index by 0.43 per cent. The MSM Shariah Index closed down by 0.77 per cent w-o-w.
Oman corporate profitability grew by 44.9 per cent QoQ but was down 5.3 per cent on a YoY basis to RO 145.5m in 1Q19. Reason for such a high growth on a QoQ basis was due to lower profitability reported by Power Sector in 4Q18.
• Except a few companies notably Omantel, almost all companies have announced the 1Q19 results.
• Overall, Oman corporate profitability rose on a QoQ basis by 44.9 per cent while it was lower by 5.3 per cent on YoY basis.
• Companies in Banking, Food & Beverage and Diversified Services reported growth in income on both QoQ and YoY basis.
• Companies reporting higher profit on both QoQ and YoY basis are Bank Muscat, Sohar International, Ahli Bank, Muscat Insurance, Takaful Oman, Al Ahlia Insurance, Gulf Mushroom, Al Anwar Ceramics, Oman Packaging, Oman Chlorine, Voltamp, Dhofar Tourism, Sharqiyah Desalination, Muscat City Desalination, Renaissance Services and Oman Investment & Finance.
• Companies reporting losses in last four quarters are Financial Services, Dhofar Beverages, Oman Europe Food, Gulf Stone, Oman Ceramics.
In the weekly technical analysis, as we mentioned in our last report that MSM index crossed down again the level of 4,040 points this will lead the index to be under pressure. Currently MSM index still in the downtrend channel to exit from this channel it needs to close above 4,040 points while in time being the index will be stable at this level. Currently the index have a support level at 3,940 points.
The IMF team visited the Sultanate from March 26 to April 8 to hold the 2019 Article IV consultation discussions with Omani authorities. In a statement following the concluding of the visit, IMF noted improvement in Oman’s overall fiscal balance last year. The fiscal deficit is estimated to have declined to about 9 per cent of GDP from 13.9 per cent of GDP in 2017, reflecting higher oil revenues. The fiscal deficit is projected to decline to about 8 per cent of GDP this year, as the impact of lower oil prices is more than offset by a decline in spending, one-off revenue, and implementation of a new excise tax on selected products.
External buffers remain adequate, according to the IMF. Gross international reserves of the Central Bank of Oman increased by about $1.3 billion in 2018 to $17.4 billion.
The government’s external assets in the State General Reserve Fund, Oman’s sovereign wealth fund provide additional buffers. The exchange rate peg to the US dollar is appropriate considering the structure of the economy.
The rate of inflation in the Sultanate rose by 0.43 per cent in March 2019, compared to the same month in 2018, according to the latest data released by the National Centre for Statistics and Information (NCSI). The rise in the price index in March 2019 compared to the same month in 2018 is attributed to the rise in the prices of the major groups, such as food and non-alcoholic beverages by 2.26 per cent, restaurants and hotels group by 0.24 per cent, clothing and footwear group by 0.04 per cent, education group by 2.02 per cent, culture and entertainment by 0.34 per cent, furniture, household equipment and regular household maintenance by 4.66 per cent.
The Tender Board approved tenders’ packages worth over RO 108 million resulting in total awarded tenders on YTD at RO 319 million. The key contracts include Construction of two tunnels and additional works at Al Sharqiya Expressway Dualisation Road worth RO 71.6 million and flood-risks protection dam at Al Jefainah in the Wilayat of Al Amerat, Muscat Governorate for the Ministry of Regional Municipalities and Water Resources worth about RO 34.6 million.
Abu Dhabi Securities Exchange topped the GCC financial markets up by 4.74 per cent while Muscat Securities Market was the lonely loser.
Saudi government reserves dropped by 0.39 per cent MoM in Feb’19 to SAR 483.4 billion, the lowest level since Jan 2009, according to Saudi Arabian Monetary Authority (SAMA) data. On the other hand, the government current account decreased by 13.4 per cent MoM in Feb’19 to SAR 48.31 billion.
The UAE’s current account surplus increased by 37.6 per cent year-on-year in 2018, recent data by the Central Bank of the UAE showed. The state’s current account surplus grew to AED 139 billion last year, representing 9.1 per cent of gross domestic product (GDP), compared to AED 101 billion in 2017 that made up 7.3 per cent of GDP, according to the central bank. The central bank attributed the growth of the current account surplus to an increase of AED 52.2 billion in the UAE’s trade balance, which is mainly linked with oil prices.
(Courtesy: U-Capital)
Oman Observer is now on the WhatsApp channel. Click here
