MUSCAT — “There is nothing to worry about the current global financial crisis and the government is closely monitoring the economic situation,” said Maqbool bin Ali Sultan, minister of commerce and industry and chairman of the Capital Market Authority (CMA), yesterday.

He was addressing a press conference on the CMA premises during which he pointed out that the Sultanate’s financial and economic situation in general, and that of the banks and public companies in particular, were excellent.

Pointing out the main reasons behind the plunge of MSM index, he said, MSM had been affected by the trends that affected the global stock markets resulting in the loss of all gains that had been achieved during the current year.

Despite such loss, MSM is still considered one of the best performing markets in the region and the world.

The earning per share is slightly less than 9 per cent, an indication that all investors have good profit potential from buying market shares, he said.

The slump in MSM indices is not justified taking into consideration the 54 per cent growth or RO411 million profits made by the listed companies during the first half of this year against RO266 million during the same period last year.

The profits also grew by 42 per cent during the third quarter this year and are expected to grow further by the end of this year, he added.

MSM needs major investors and corporates. The CMA is currently considering establishing a Market Maker Fund which will have the ability to maintain the market’s rhythm in case of fluctuating performance, he added.

The banks in the Sultanate do not suffer any problem with liquidity. The trend is very clear from the statement issued by the Central Bank of Oman (CBO), which shows that banks have enough liquidity.

“Therefore, there is nothing for the shareholders and depositors to worry about. Banks should also continue their lending business on the same patterns like before,” he added.

The government spending on the current projects will continue and will not be reduced in the backdrop of the slump of oil prices, he added.

The inflation rate in Oman has declined and this is clearly manifested in the slump in the prices of certain building materials, food stuffs and cereals, he added.

In terms of foreign investment, Maqbool said, the foreign investment ratio at MSM accounted for 16 per cent of the market value in 2005 against 27 per cent at the end of 2007 and 30 per cent at the end of March 2008 and the present 26 per cent.

The slump is mainly attributed to speculations by foreign investors and not by corporates, he said.

As for the investments of the Omani banks abroad, Maqbool said that most of the banks’ and insurance companies’ assets are inside the Sultanate, thanks to the sound regulations by CBO and CMA.

“This means that the Omani investments abroad will be only slightly affected because they are marginal”.

As for marginal finance and derivatives, Maqbool pointed out that the Sultanate does not allow derivatives or marginal finance or direct finance of the projects by foreign banks.

The monetary and financial policies as well as company audit in the Sultanate are good especially there is continuous coordination among the respective authorities, he added.

Maqbool also pointed out that there is continuous coordination among the AGCC states on the current crisis. There will be a meeting between the AGCC finance ministers and the AGCC central banks executives on the sidelines of the meetings of International Monetary Fund (IMF) and World Bank in Washington.