Capital Markets
From The Report: Oman 2018
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The sultanate is home to a well-developed stock exchange, the Muscat Securities Market, which was founded in 1988. The equity market has seen a decline in initial public offering activity in recent years; however, it witnessed a resurgence in 2017 thanks to government-driven offerings, more of which are set to take place in 2018. On the debt side, there has been a recent uptick in issues and listings, while the sukuk (Islamic bond) market also appears to be developing. This chapter contains an interview with Abdulaziz Mohammed Al Balushi, Group CEO, Ominvest.
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Renewed interest: Performance is set to improve as listing activity picks up and new products launch
Attractive terms: Abdulaziz Mohammed Al Balushi, Group CEO, Ominvest, on the strategies being used to revitalise the economyOBGplus
Interview:Abdulaziz Mohammed Al Balushi How have credit ratings affected the sultanate’s ability to finance its budget deficits? ABDULAZIZ MOHAMMED AL BALUSHI: Despite its weakening fiscal position and rating downgrades, Oman has been able to secure funding at attractive terms primarily because of its low debt-to-GDP ratio of 29%, political stability, strong economic ties to GCC countries and plans on economic diversification away from oil. Another main reason for Oman to be able to tap…
Back on track: The exchange has seen a rising number of listingsOBGplus
Equity listings activity in the sultanate has been muted in recent years. After having steadily risen in number from two in 2012 to four in 2014, only one public offering took place in 2015 – though the listing, of Phoenix Power Company, was the largest in recent years, raising OR563.1m ($1.5bn), more than double the combined value of all initial public offerings (IPOs) over the previous three years. In 2016 there were no IPOs, although eight private placements took place. The fall was…
Staying strong: BanksOBGplus
The Omani banking sector comprises a total of 16 conventional banks, of which seven are locally incorporated and nine are foreign banks. Apart from conventional lenders, there are also two fully fledged Islamic banks. Bank Muscat is the largest bank with a market share of around 45% by assets. It is the biggest listed company on the Muscat Securities Market, with a market capitalisation of $2.8bn and one of the most dominant franchises in Oman with a large network of branches, clients and…
Healthy demand: BondsOBGplus
For the first time since 1997, the government of Oman issued $2.5bn foreign bonds in June 2016 with maturities of five years and 10 years. Later, in September 2016, the government expanded the size of the issue to $4bn. During 2016 Oman joined several other governments and companies in tapping the global bond market to fund budget shortfalls after price of crude oil plunged by more than half from its peak in 2014. Oman’s budget deficit ballooned to OR5.3bn ($13.8bn) in 2016, significantly higher than the budgeted OR3.3bn ($8.6bn). During the first nine months of 2017 the deficit narrowed to OR3bn ($7.8bn), a 32% decline compared to…
Highly competitive: InsuranceOBGplus
The insurance market in Oman has continued recording healthy growth despite the financial challenges and the impact of falling oil prices in the past two years. The market consists of 22 insurance companies, including a re-insurer company and takaful (Islamic insurance) companies which started operations in 2014. The overall industry has expanded at a compound annual growth rate (CAGR) of 9.6% between 2011 and 2016, and its total gross written premiums (GWPs) reached OR450.3m ($1.2bn) in…
Changes ahead: TelecomsOBGplus
The telecoms market experienced a continued rise in revenue and investments in 2016, with growth rates of approximately 5.6% and 30.9%, respectively. Total mobile subscribers increased to 6.86m with a growth of roughly 3.3%. Ooredoo saw an uptick of 3.9% in mobile and fixed customers, while Omantel recorded a growth of 7.4% in subscribers. Analysis Of Business Omantel’s share price declined in the third quarter of 2017 to its lowest level in three years. However, the news regarding the acquisition of a 21.9% stake in Zain Group, a leading mobile operator in eight MENA countries, and nomination of four new board members had a positive…