Business


Analysts praise first half growth of Muscat Securities Market


Left, Haitham bin Salim Al Salmi, centre, Ahmed bin Said Kashoob and right, Mustafa Ahmed Salman

Muscat: Economic analysts and observers praised the performance of the Muscat Securities Market (MSM) during the first half of 2014.

The general index achieved a positive growth, rising by 150.84 points, accounting for 2.54 per cent growth, while the market value grew by five per cent to OMR14.9 billion as a result of the new listings that the market saw in this time.

Analysis of sector-wise performance showed that the financial sector, particularly shares of the traditional banking sector, outperformed the rest as all these banks achieved positive growth except for one bank out of the six.

Power sector
The companies in the power sector outperformed other sectors with all of these companies achieving positive growth. At the same time, most of the companies in the industrial sector achieved a modest performance during the same period.

Mustafa Ahmed Salman, chief executive officer of United Securities said that the performance during the first half of 2014 was "lower than our expectations." He pointed out that the MSM was expected to grow alongside the Gulf markets, but still it did not necessarily mean that the market was not good during the period.

The market general index improved its performance after May and started rising towards 7,100 points. Once the index reached a peak of 7,200 points in January but plunged to its lowest in May to 6700 points.
In a statement, Mustafa said no significant growth was noticed in corporate results in response to the hiked minimum salaries in the private sector, which came into force by the end of 2013. This is expected to improve in future as companies will start rearranging their conditions.

Ahmed bin Said Kashoob, chief executive officer of Global Investment Trust Company, said that the results achieved by the MSM are positive, and reflect the good performance of the market.

Bull phase expected
He confirmed that the market was poised in the positive direction and its expected rise is based on expectation about the integration of Sohar and Dhofar Banks and new offerings, in addition to the decision made by the Capital Market Authority (CMA) to reduce the period of disclosure to 15 days, a move that will reinforce the investor confidence in the market.

Haitham bin Salim Al Salmi, deputy chief executive officer of Business Development and Operations at the Gulf Company Badar Capital Markets, said that the MSM achieved good volumes during the first half, reaching OMR10 million as a result of the new offerings witnessed by the market shares of power companies and the sale of a chunk of government's shares in Omantel through initial public offering (IPO).  
He added that the high index does not necessarily reflect the market reality as the share prices are still the best and the cheapest, and are undoubtedly attractive.

The total number of transactions in the first half of this year reached 229,900, executed in 126 days, while the average value of daily trading was OMR10.1 million.

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