MUSCAT -- The Muscat Securities Market (MSM) is set to offer Internet-based trading facility for brokers and investors from end of May, Ahmed bin Saleh al Marhoon, Director General of the bourse told the Observer. Once implemented, those investors who have an arrangement with a local broker can execute orders from their office or home.
"We have evaluated the technical details of the project. This is an important project for further developing electronic trading", added Al Marhoon on the sidelines of the bourse's annual general meeting yesterday. "Internet-based trading for the bourse is overdue now. Earlier, we did not had a trading system to introduce such a trading facility," he said, adding, "with the recent introduction of the Atos Euronext, we can introduce Internet-based trading now".
"Individual investors who have arrangement with an MSM broker can place orders and strike the deal from anywhere in the world", Al Marhoon said. He noted that the brokers would introduce an order management system, which will be hooked on to MSM trading network for Internet trading. With the easing of trading facility, it is expected that the traded volume will improve tremendously. "The experience of other regional bourses shows that the traded volumes have improved tremendously", he noted.
An important factor in raising the traded volume through Internet-based trading will be due to interest from overseas investors. Once Internet-based trading is introduced, the brokers are expected to target foreign investors. "With the introduction of Internet-based trading, we will be able to attract more foreign investors", noted a broker, while referring to the advantages. Apart from helping to enhance traded volume, it saves time for executing orders.
The introduction of Internet-based trading is very timely as the Muscat Securities Market has already replaced its old system with a state-of-the-art trading facility developed by Europe's leading IT solutions provider company, Atos Euronext. It can integrate markets and provide the users with greater flexibility as it can facilitate information dissemination and surveillance systems more effectively.
MSM Chairman Abdullah bin Salem al Salmi stated that the MSM 30 index soared by 44.45 per cent or 1,500 points in 2005 to close at 4,875.11 points from 3,375.05 points by the previous year-end. "This positive performance of the market was reflected in market capitalisation of the listed securities to register RO 5.876 billion at the end of December 2005 compared with RO 3.587 billion at the end of December 2004", he added.
Al Salmi said the Atos Euronext has submitted its recommendations on developing the market for another five to ten years. "The market will start to implement some of the recommendations of the study in 2006", he added. The primary market registered marked improvement with the total size of the issue touching RO 679.9 million for 2005 as against RO 339.99 million in the previous year.
The market witnessed the listing of eight issues amounting to RO 382.3 million. Of this, four joint stock companies floated initial public offerings (IPOs) with a combined value of RO 314.9 million, government and corporate bonds were to the tune of RO 53.6 million and mutual funds raised another RO 13.8 million from the market. Traded turnover also achieved record growth with the bourse witnessing a phenomenal 85.4 per cent growth in turnover at RO 1.407 billion in 2005.
Plans to bring down brokerage fee
The Muscat Securities Market (MSM) is planning to bring down brokerage fee in an apparent move to help the investing community. "We are planning to bring down the fee charged by brokers. We have to discuss it internally and with the market participants", MSM Chairman Abdullah bin Salem al Salmi told the Observer.
Al Salmi said brokerage companies charge anywhere between 0.40 per cent to 0.75 per cent as commission from investors for executing a deal. This fee is shared by brokerage companies and the Muscat Securities Market, with the latter getting a share of 20 per cent of the commission.
By A E James
© Oman Daily Observer 2006
