Arab News, Mon, Jun 24, 2024 | Dhu al-Hijjah 18, 1445
Oman’s capital market draws 135 nationalities; foreign investments up 19%: MSX data
Oman:
Oman’s capital market has attracted investors from 135 nationalities, up from 67
in 2023, supported by favorable policies including low tax rates and flexible
capital transfer options.
Newly released statistics from the Muscat Stock
Exchange reveal a 19 percent increase in foreign investments as of May,
including participants from the Gulf Cooperation Council, Arab countries, and
beyond.
Oman’s capital market has implemented policies
favoring foreign investments, including unrestricted profit repatriation and
exchange operations. This trend aligns with the nation’s economic resurgence and
growing institutional confidence in government strategies aimed at reducing
public debt, increasing investment in essential services, and launching
infrastructure projects to bolster private sector participation.
The MSX data also indicates that foreign
investments are predominantly focused on the industrial and service sectors,
accounting for 15.8 percent and 15.7 percent respectively.
Gulf investors are particularly focused on the
services sector, accounting for 15.4 percent, and the financial industry at 8.5
percent.
Conversely, non-Gulf Arab investments are
primarily directed toward the financial sector, comprising 3 percent.
Local investments heavily favor the financial
industry at 87.6 percent, followed by the industrial sector at 75.6 percent and
the services sector at 67.7 percent.
The first half of this year has seen significant
growth in trading activity at MSX, underscoring heightened market dynamism.
Trading volumes surged to 3.1 billion securities,
surpassing 517 million Omani rials ($1.3 billion) in value by the end of May,
marking a notable 38.4 percent increase from the previous year.
Executed transactions also rose, reflecting
increased market participation and liquidity.
The exchange is expanding its database on listed
companies to enhance transparency and advocate for disclosure standards among
publicly traded entities, the Oman News Agency reported.
Additionally, efforts are underway to encourage
government and family-owned businesses to transition into privately held
entities, enriching market diversity and investment opportunities.
Foreign investors can invest in shares of
MSX-listed companies or investment funds without prior permission, under the
oversight of an independent supervisory body ensuring market fairness, investor
protection, and transparency.
Foreign investment in MSX-listed public
joint-stock companies is permitted up to 100 percent, with significant interest
observed in the industrial and services sectors, highlighting diversified
investor preferences.
Reflecting positive sentiment, the market
capitalization of MSX-listed public joint-stock companies reached 9.4 billion
rials by May’s end, up 448.5 million rials since the start of the year.
The broader market value of all MSX-listed
securities rose to 24.48 billion riyals, a gain of 676 million riyals
year-over-year, bolstered by contributions from closed companies and the bond
and sukuk market.
Market indices reflected this growth, with the
main index climbing to 4845 points by May’s close, up 331 points from the
previous period.
Successful IPOs by entities like Abraaj Energy
Services and OQ Gas Networks have attracted new investors and boosted market
liquidity, with OQ considering IPOs for two more subsidiaries this year,
according to Bloomberg.
This upward trend underscores investor confidence
in MSX’s growth potential, supported by Oman Investment Authority’s plans to
offer additional companies for public subscription in the coming years.
The OIA reported a 7.4 percent year-on-year
increase in Oman’s sovereign wealth fund assets, reaching 19.24 billion rials in
2023, with a 9.95 percent return on investment, as disclosed in a statement on
X.
This performance underscores the authority’s
pivotal role in fostering economic growth and stability in the Middle Eastern
country.
The robust results also reflect the OIA’s
strategic investment approach and effective management of its diverse portfolio,
in line with its mandate to manage national funds and assets, build financial
reserves, and advance targeted economic sectors through government policies.
At a media briefing in Muscat earlier this month,
the authority affirmed its commitment to contributing over 6 billion rials
annually to the state’s general budget from 2016 through 2023.
The statement further outlined the OIA’s plans to
geographically diversify its new foreign and local investments across various
sectors, while facilitating technology transfer and modern techniques to bolster
targeted local industries.
Looking ahead, MSX aims to strengthen its
regulatory framework, expand investor outreach initiatives, and cultivate an
environment conducive to sustainable economic growth, the Oman News Agency
reported.
By enhancing its reputation as a gateway for
international investment and adhering to global best practices in financial
markets, MSX aims to maintain its position as a leading choice for investors
interested in opportunities in Oman’s dynamic capital market, it added.