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Investment Stabilisation Fund achieves 6.4pc NAV growth in Q1

MUSCAT -- The Investment Stabilisation Fund (ISF), set up last year as a joint public-private sector initiative to help shore up the stock market, has achieved a 6.4 per cent in its Net Asset Value (NAV) during the first quarter of this year.

In a report on its first quarter performance, ISF Chairman Dr Rashid bin Salem al Masroori said the Fund held a total of 110.920 million units as of March 31, 2010 with a Net Asset Value (NAV) of RO 139.767 million. This resulted in a NAV of RO 1.26007 per unit.

"The ISF started the financial year with a greater focus and attention to market conditions, as well as being aware of the challenges facing us, regional economies and global market," Dr Al Masroori stated in the Chairman's Report.

"Oman, being similar to other nations, depends mainly on oil and gas price performance despite its endeavours to diversify into other sectors of the national economy. In this regard, the trend of oil prices with average prices in the range of $77 per barrel for Omani crude during the first quarter started filtering into the expectations of many monetarists and investors, setting new targets and prognostications for our national stock market. However, we are pleased that such expectations are more positive for the coming period, assisting expectations of a revenue surplus for the government and giving impetus to their spending activities," he said.

With a NAV growth of 6.4 per cent in Q1 2010, the Fund has outperformed the MSM-30 Index, which gained 5.2 per cent during the same quarter on the back of a 2.5 per cent gain in the Banking & Investment Index, followed by a 0.2 per cent increase in the Industry Index and 1.8 per cent decline in the Services Sector Index. The market breadth witnessed considerable improvement with a daily average traded value of about RO 6 million, he noted.

"The Fund will continue to focus on enhancing returns to its unit holders, while at the time endeavour to provide the MSM with appropriate liquidity and incentives to assist in stabilising the stock market," Dr Al Masroori stated.

The Investment Stabilisation Fund was set up as an open-ended fund with a capital of RO 150 million, made up of a 60 per cent (RO 90 million) contribution from the government, with the rest (RO 60 million) distributed among pension funds and the private sector represented by banks, investment companies and companies operating in securities.

The investment objectives of the Fund are aimed at assisting in stabilising the prices of equities listed on the MSM, boosting investor confidence and liquidity in the MSM, investing in listed companies with strong fundamentals, and achieving capital growth for unit holders over the long term.

By Staff Reporter

© Oman Daily Observer 2010