Gain some lose some

Despite a marginal loss during June-July the MSM index has still managed to be the best performing bourse in the GCC region

The MSM 30 index was down by 1.5 per cent for the period from 16th June to 15th July mainly due to unfavourable news in the banking sector. Change in banking regulations to curb high liquidity in the country led to negative sentiment in banking stocks as a whole. The banking and investment sector index fell by 5.6 per cent during the period.

The industrial and services sector index though bucked the trend by gaining 6.4 per cent and 3.3 per cent respectively. Average daily turnover increased by 14.6 per cent to RO24.7 mn for the period, mainly due to bulk deals in BankMuscat and ONIC Holding.

MSM-30 index however remains the best performing index in GCC with foreign investors flocking to companies with a good growth potential. Voltamp energy’s listing on 17th June 2008 saw a good amount of buying interest with the stock listing at RO1.200 compared to the subscription price of RO0.542.

Divestment strategy
The government has announced a divestment of its 25 per cent stake in Omantel. Citigroup Global Markets is the lead advisor while National Bank of Oman is the local advisor to the government for the proposed sale.

In corporate events, Al Omaniya Financial Services has received approval for debt factoring, bills discounting, bridge loans, working capital loans, project and construction loans (manufacturing & warehousing only). In other corporate events, Galfar announced various contract wins of approximately RO90 mn in the same period.

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The month ended July 15, 2008 saw a blood bath in the GCC markets with all major indices ending in the red. This dip was primarily due to enhanced geo-political tension in the region. The Saudi market was the worst performer, down 10.12 per cent. All the major indices ended registering a dip with the real estate index taking the worst hit of 14.05 per cent despite a favorable mortgage law passed by the Shura Council. DFM registered a decline of 6.02 per cent and all the major indices ended on a negative note. The investment counters were among the top losers and the investment index was down 10.75 per cent. The DSM registered a drop of 5.49 per cent, but continued to be the second best performing market YTD amongst GCC markets. The services and banking counters were among the top losers and the respective indices fell by 7.29 per cent and 6.31 per cent respectively. The KSE and the ADSM lost 4.24 per cent and 3.32 per cent respectively, while the investment index was among the top losers on the KSE shedding 5.49 per cent. The industrial counters were net sellers on the ADSM and the index lost 6.85 per cent. The Bahrain bourse registered a least hit and the general index lost 2.16 per cent during the month. The banking index was the worst performer ending down 3.90 per cent partially offset by a rise of 2.17 per cent in the insurance index.

Data and analysis by Vision Securities Co. LLC (Vision). While utmost care has been taken in preparing the above report, neither Vision nor Oman Economic Review makes any guarantee, representation or warranty, whether express or implied, and accepts no responsibility or liability as to its accuracy or completeness of the data being provided.

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