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Mar 15 2012

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MSM continues upward march

IPOs poised to heat up market
MUSCAT -- The Muscat Securities Market (MSM) general index (30) continued rising when it added 18 points constituting a rise by 0.30 per cent to close at 5,975 points compared to 5,957 points earlier.
The financial sector rose by 0.87 per cent to close at 6,956 points compared to the earlier closing of 6,896 points. The industrial sector also rose by 410 per cent to close at 6,524 points compared to the earlier 6,497 points. The services rose by 0.09 per cent to close at 2,725 points compared to 2,722 points.
The trade value yesterday stood at RO 4.9 million comprising a rise by 49.8 per cent compared to the last session yesterday which stood at RO 3.3 million. The market value rose by 0.08 per cent to reach about RO 10.8 billion.
Out of the 54 companies of which shares changed hands yesterday, 27 rose, 11 declined and 16 stabilised.
MSM is expected to witness immense expansion with initial public offerings (IPOs) during the rest of this year, marking the biggest wave of such activity on MSM in 12 years.
Three major IPOs are due to bolster the monetary activity via Islamic banking, which was okayed recently in the Sultanate.
These will be the IPOs of the Islamic banks of Nizwa and Al Izz, in addition to Oman Arab Bank's pledge to float 25 per cent of its shares on the market.
Estimates indicate that IPOs, preferential rights and an increase in capitals of companies and banks will touch RO 500 million this year and that subscription for IPO's in the Arab Gulf region will register good growth. IPOs in deeds alone crossed RO 160 billion, with most of the parties issuing them located in the Arab Gulf region, and the figure is expected to cross 200 million, posting a growth rate of more than 25 per cent during 2012.
Many companies and banks have announced increase to their capitals via preferential rights. These institutions include BankMuscat, Bank Sohar and Ahli Bank.
The returns will be dedicated to offering Islamic banking services.
Many companies beyond the monetary sector have also announced plans to increase their capitals to support their prospective growth and these include Al Nahda Services and Al Wataniya Financing.
The IPOs due to enter MSM are enhance the market's investment potential, while liquidity rates will soar and thereby attract new categories of investors from the Sultanate and abroad.
IPO operations are encouraged by the new corporate law due to be announced soon.

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