Capital Markets
From The Report: Oman 2020
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The overall performance of Oman’s capital markets in 2019 was somewhat mixed. While the country’s credit market continued to grow, underpinned by strong sovereign debt issuance, the equity market declined in the wake of a slowing economy. However, stock market valuations have improved considerably, a number of new debt issuances are in the pipeline and the Capital Market Authority is in the process of introducing a number of new laws that should be positive for the development of the sector. This chapter contains an interview with Abdulaziz Al Balushi, Group CEO, OMINVEST.

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Overview

Improved prospects: Regulatory reform and high dividend yields are set to attract greater international investment
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The overall performance of Oman’s capital markets in 2019 was somewhat mixed. While the country’s credit market continued to grow, underpinned by strong sovereign debt issuance, the equity market declined in the wake of a slowing economy. However, stock market valuations have improved considerably, a number of new debt issuances are in the pipeline and the Capital Market Authority (CMA) is in the process of introducing a number of new laws that should be positive for the development of…

Interview

Stepping stones: Abdulaziz Al Balushi, Group CEO, OMINVEST, on assessing the economy through bond issuances, credit ratings and cash flow
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Interview:Abdulaziz Al Balushi How successful have bond issuances been in providing funding for government spending and as a mechanism for private sector financing? ABDULAZIZ AL BALUSHI: When the government unveiled the budget for 2019, it forecast a $7.3bn budget deficit, of which $6.2bn was to be funded through debt. However, as of November 2019 Oman had issued $3bn in external debt, less than half of the budgeted amount. It is also significantly lower than the $8bn issued in 2018. The…

Analysis

Mixed fortunes: Central bank reforms and robust profitability support gradual consolidation of the banking sector
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The Omani banking sector comprises 16 conventional commercial banks, of which nine are branches of foreign financial institutions and seven are locally incorporated. In addition, there are two state-owned specialised banks and two local Islamic banks. Sharia-compliant banking, which was introduced in 2012, accounted for 13% of Oman’s banking sector in 2019. Indeed, in recent years the Islamic segment has grown faster than conventional banking, with this being evident in its net profits,…

Analysis

Foundations to build on: Major construction projects are supporting demand for locally manufactured building materials
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Industry and manufacturing is one of the key sectors expected to contribute to the country’s economic diversification strategy. In order to support the development of the sector, the government has unveiled a range of initiatives to attract investment. Industrial activities registered growth of 1.5% in 2018, contributing OR5.53bn ($14.4bn) to GDP, compared to OR5.44bn ($14.1bn) in 2017. However, according to preliminary figures from the National Centre for Statistics and Information, industrial…

Analysis

Talk of the town: Increased demand for data stimulates telecoms activities and brings a new mobile operator to the market
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The Omani telecoms industry is among the most developed in the region in terms of the services provided and the competitiveness of the market. The mobile penetration rate increased to 143% in June 2019, up from 141.3% in 2018. Meanwhile, the number of fixedline subscriptions grew to 448,189 in the same period, marking a penetration rate of 72%. Currently, there are 15 licensed telecoms providers in the country classified across three categories. The first includes the country’s four main…

Analysis

Healthy appetite: Government and corporate bonds attract international investors
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After a hiatus of 18 months the government of Oman returned to the international debt market in August 2019 with the issuance of a $3bn dual-tranch bond, made up of $2.25bn worth of 10-year bonds and $750m worth of five-year bonds. The issuance attracted considerable interest from investors, with the overall issue oversubscribed, attracting orders of up to $13.6bn. As a result of this strong demand the sultanate was able to issue the debt at reasonable rates, with the five-year bonds being…