Sharp Recovery
Improved global sentiment and investor confidence helped the MSM index to shoot up sharply

The MSM30 benchmark continued its momentum as it rose 6.18 per cent for the month ended May 15 2009. This time the rally was mainly led by industrial sector stocks. The recovery in MSM was in tandem with the global markets, as investors showed signs of higher risk appetite. Market activity improved as volume increased by 44 per cent month-on- month while average turnover per day increased by 20 per cent for the same period, to RO11mn. Market breadth was favourable with advance decline ratio of 5:3.

Government’s plans to carry on with development spending provided the impetus to the markets. Investor confidence seemed to have picked up given attractive valuation of blue chip stocks. Industry index outperformed and was up 18.5 per cent for the same period while service index underperformed during the same period recording marginal gains. The index heavy weights that lead the rally were Oman Cement (38.5 per cent) Oman Cable (34.3 per cent) and Bank Sohar (25.2 per cent).

Corporate happenings
In key corporate events, Al Batna Quarries, one of the subsidiary companies of Al Batinah Development and Investment Holding Company (ABDIH) raised its capital to RO2mn. In other corporate developments, Port services Corporation signed an agreement with supplier for three units of RTGs cranes at a total value of RO1.50mn. Dhofar Power’s shareholders, holding 10,619,378 shares (constituting 53.9 per cent of the issued and paid up capital of the company) informed the company that they are in discussions with Electricity Holding Company (EHC), whereby EHC would acquire their entire shareholding in the company. In result announcements, BankMuscat reported a net profit of RO48.4mn for 1Q2009, as against a net profit of RO26.5mn in 1Q2008. The net profit for 1Q2009 includes RO 35.3 mn of post-tax gain on the sale of its investment of HDFC Bank. Omantel reported net profit after tax of RO37,943mn in 1Q2009, compared with RO38,415mn in 1Q2008.
 

GCC markets
Most of the GCC markets ended mixed with Qatar and Saudi markets outperforming all other market for the month ended May 15, 2009. Qatar and Saudi markets are perceived to be safe havens in the current downturn due to accumulated reserves and government development commitments. In addition, investors in both markets tracked a US-led world markets rally. Qatar market was up 24 per cent as the local government revealed its plans to support the local financial sector. Kuwait ended mostly flat as investors refrained from long calls in the market before the parliamentary election. Dubai and Abu Dhabi markets had mixed news flow as banks reported better outlook while real estate companies still posed higher risk.
 
Data and analysis by Vision Securities Co. LLC, a Member of EFG Hermes. 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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