Muscat: Oman's large companies, which constitute the MSM 30 Index, will be paying an overall cash dividend of OMR263 million for 2012, up by 9.7 per cent over the previous year.
Market analysts believe that a portion of the dividend cash, may be around 20 per cent, will be reinvested in the local bourse in the coming months. "However, it will depend on the growth potential, first quarter earnings and global sentiment," said Kananga Sunder, Senior Manager – Research – of Gulf Baader Capital Markets.
However, Suresh Kumar, Head of Research at Al Maha Financial Services, expects as much as 50 per cent of the dividend money coming back to the market for reinvestment.
According to Gulf Baader Capital Markets, the net earnings of MSM30 Index companies soared 19 per cent to OMR562 million for 2012, over the previous year.
120 listed companies
Another study conducted by United Securities found that the dividend yield of top 25 companies on the Muscat bourse stands out at 4.5 per cent, which is more or less equivalent to government bond yield. The Muscat Securities Market has around 120 listed companies.
Santhosh Balakrishnan, Equity Research Analyst at the United Securities, said that the dividend yield of Oman bourse is way above the GCC average of 4.1 per cent in 2012. "The dividend yield of the UAE and Saudi bourses is lower than Oman," he added. Among different industry segments, power, telecommunication, cement, leasing and hire purchase and oil marketing companies have paid comparatively higher dividends.
Suresh Kumar said the total dividend payout of MSM 30 Index companies have shown a whopping 80 per cent growth in the last eight years - from merely OMR140 million in 2004 to this level in 2012.
Market analysts also noted that the bourse will witness a correction in the coming weeks, mainly due to ex-dividend price adjustments. "We will see a two to three per cent correction in the general index in the coming weeks. Majority of annual general meetings will be happening in the next seven to eight and all AGMs will get over by April 1," noted Kanaga Sunder.
Market operators said that the tremendous growth in traded volume and turnover is a positive indication. The average daily market turnover in the first two months of 2013 was around OMR7.7 million, which is against last year's average daily turnover of OMR4 million. "Regional and international players are pretty active in the market," noted Sunder.
The total market turnover in the first two months touched OMR300 million.