Interview: Abdulaziz Al Balushi

How do you expect investment inflows to perform over the next 12 months?

ABDULAZIZ AL BALUSHI: In 2022 the Muscat Stock Exchange (MSX) initiated steps to help integrate the bourse into the regional ecosystem of stock exchanges. The primary objective was to improve liquidity in the local market, mainly by upgrading the MSX to emerging-market status, which necessitates adherence to a minimum set of criteria stipulated by international indices such as FTSE and MSCI. This, in turn, will unlock capital inflows, widen the investor base and deepen the market.

The MSX eased all restrictions on foreign ownership limits for all listed securities. At the same time, the MSX mandated listed businesses to incorporate governance, diversification and inclusion as the cornerstones of their sustainability strategies. Leveraging our experience in this space, we will continue to assist listed companies gearing up to embrace tripartite governance standards and sustainability in their growth strategies.

For the first time, dual and cross listings are being enabled across the region through the establishment of linkages and partnerships. In January 2023 the MSX signed an agreement with the Abu Dhabi Securities Exchange and the Bahrain Bourse to enable access to Tabadul, an integrated platform that allows GCC investors to trade in regional markets.

Blue-chip companies were largely responsible for the 17.6% growth seen on the MSX 30 Index over the course of 2022, which closed at 4857.44 points. Underscoring this upward trend, OMINVEST revenue increased by 69.9% from OR188.2m ($489m) to OR336.8m ($875.1m) by end-2022, and its assets increased by 61.8% from OR800m ($2.1bn) to approximately OR1.3bn ($3.4bn) By what means can small and medium-sized enterprises (SMEs) and start-ups be encouraged to seek growth opportunities through the capital markets?

AL BALUSHI: Measures have recently been implemented to enable SMEs to secure funding from the capital markets. A memorandum of cooperation with the Authority of SME Development in October 2022 enabled the listing of SMEs on the bourse. The goal is to make it possible for SMEs to trade, buy and sell securities and financial instruments on the stock exchange, in addition to promoting awareness among entrepreneurs of the importance of listing on the MSX.

We believe it is important to empower SMEs and entrepreneurs. Through our partnership with Zubair Enterprises Development Centre, OMNIVEST supported two start-ups that provide solutions to pressing environmental issues. Moreover, we have been a sponsor for The Company Programme by INJAZ Oman since 2018 which provides students the opportunity to develop their ideas into a business. In doing so, they learn about the challenges and benefits of entrepreneurship.

In what ways can local capital markets players leverage innovative solutions to enhance services?

AL BALUSHI: The MSX plans to evolve into a future-oriented exchange, notably by leveraging technology to enhance its financial performance. To this end, it has stressed the importance of Fourth Industrial Revolution technologies to help achieve its long-term ambitions. It wants to harness the capabilities of big data, robotics and artificial intelligence, among other emerging technologies, to evolve into a smart exchange.

In line with global trends in digital currencies and virtual assets, the regulator has announced the development of a regulatory framework for virtual assets and virtual asset service providers. This will help underpin the development of the digital asset and financial technology industry in the sultanate. By regulating virtual assets, the Capital Market Authority aims to provide an alternative financing and investment platform for issuers and investors alike, while mitigating the risks associated with this asset class. The framework will cover activities such as crypto-assets, tokens, crypto-exchanges and initial coin offerings, among others.