24 June 2012
Muscat: Oman's first Islamic bank -" Bank Nizwa -" could not elect its first board on lack of required quorum at its constitutive general meeting last week, giving credence to market speculation that there could be a slight delay in starting operation. Bank authorities in March said that it is planning to start operation in July.
Meanwhile, Bank Nizwa shares plunged almost one per cent to close at 101 baisas yesterday, amid lack of buying support from institutions.
The bank's shares started trading at 100 baisas, but declined to as low as 99 basias, before closing at 102 baisas, with 13.92 million shares changing hand.
However, Ahmed Said Al Rawahi, Chairman of Bank Nizwa Founding Committee, stated; "The bank's launch preparations are progressing as scheduled. Our staff is in place, the first three branches at Muscat, Nizwa and Sohar are currently being fitted out, the core banking system has already been deployed, and the product portfolio is under approval.
"The general meeting could not be concluded on the appointed day of June 21 as Bank Nizwa has a large base of over 37,000 shareholders with many of them not being in the country owing to the current holiday season. This made it difficult to achieve the requisite attendance norm and we are rescheduling the meeting. We are confident that in the next meeting we will have the requisite quorum,- he explained. As per the law, votes representing 75 per cent of the bank's capital are required to conduct the meeting. Bank Nizwas has 92 founding members, who have collectively invested RO90 million.
'We are on track'
Saying that the rescheduling will not affect the bank's launch plans, Al Rawahi noted, "I am glad to inform that we are on track to be ready to open our doors to the public during the third quarter of 2012, subject to CBO approval.-
The date of the new meeting is being agreed with appropriate authorities and will be scheduled to take place sometime within the next six weeks, in keeping with Capital Market Authority regulations.
Market sources said there is no clarity on when the regulation on Islamic banking will be issued and when Bank Nizwa to commence operation, which have affected the bank's share prices on the bourse. "There has been a lack of interest among institutional investors, while retailers continued their selling,- said Kanaga Sundar, Senior Analyst at Gulf Baader Capital Markets.
Sundar said that the Bank Nizwa shares quoting below its offer price of 102 basias yesterday will definitely casts a pall over other initial public offerings planned for this year, which include Oman Arab Bank's 25 per cent stake offer. "Those who plan primary issues will think twice before coming out with an IPO,- noted Sundar.
Bank Nizwa raised RO60 million in an IPO last month and the shares surged 13 per cent on its first day of trading on June 10. However, the early gains were eroded when retailers started dumping their holding on the bourse.
Muscat: Oman's first Islamic bank -" Bank Nizwa -" could not elect its first board on lack of required quorum at its constitutive general meeting last week, giving credence to market speculation that there could be a slight delay in starting operation. Bank authorities in March said that it is planning to start operation in July.
Meanwhile, Bank Nizwa shares plunged almost one per cent to close at 101 baisas yesterday, amid lack of buying support from institutions.
The bank's shares started trading at 100 baisas, but declined to as low as 99 basias, before closing at 102 baisas, with 13.92 million shares changing hand.
However, Ahmed Said Al Rawahi, Chairman of Bank Nizwa Founding Committee, stated; "The bank's launch preparations are progressing as scheduled. Our staff is in place, the first three branches at Muscat, Nizwa and Sohar are currently being fitted out, the core banking system has already been deployed, and the product portfolio is under approval.
"The general meeting could not be concluded on the appointed day of June 21 as Bank Nizwa has a large base of over 37,000 shareholders with many of them not being in the country owing to the current holiday season. This made it difficult to achieve the requisite attendance norm and we are rescheduling the meeting. We are confident that in the next meeting we will have the requisite quorum,- he explained. As per the law, votes representing 75 per cent of the bank's capital are required to conduct the meeting. Bank Nizwas has 92 founding members, who have collectively invested RO90 million.
'We are on track'
Saying that the rescheduling will not affect the bank's launch plans, Al Rawahi noted, "I am glad to inform that we are on track to be ready to open our doors to the public during the third quarter of 2012, subject to CBO approval.-
The date of the new meeting is being agreed with appropriate authorities and will be scheduled to take place sometime within the next six weeks, in keeping with Capital Market Authority regulations.
Market sources said there is no clarity on when the regulation on Islamic banking will be issued and when Bank Nizwa to commence operation, which have affected the bank's share prices on the bourse. "There has been a lack of interest among institutional investors, while retailers continued their selling,- said Kanaga Sundar, Senior Analyst at Gulf Baader Capital Markets.
Sundar said that the Bank Nizwa shares quoting below its offer price of 102 basias yesterday will definitely casts a pall over other initial public offerings planned for this year, which include Oman Arab Bank's 25 per cent stake offer. "Those who plan primary issues will think twice before coming out with an IPO,- noted Sundar.
Bank Nizwa raised RO60 million in an IPO last month and the shares surged 13 per cent on its first day of trading on June 10. However, the early gains were eroded when retailers started dumping their holding on the bourse.
© Times of Oman 2012
