Monday, Dec 22, 2008
Gulf News
Muscat: Muscat Security Market index dipped below 6,000 as the shares of Galfar Engineering Company fell below their IPO price for the first time.
During the year Galfar Engineering Company shares had soared four-fold to 2.4 Omani riyals (Dh22.98) after the company went public with a 600 baizas per share IPO last year.
The scrip for the company touched a low of 585 baiza on volumes of 831,000 shares before closing at 0.597, lower by 5.5 per cent for the day.
"There's nothing to worry as this is an impact of the global market phenomena and we expect the shares to rise again in a day or two," Abdulbaqi Daffalla, the Galfar Engineering Company's board secretary, told Gulf News on Sunday.
He said that the company's results in the third quarter of this year had no impact on the declining share price.
"Our results had nothing to do with the drop and it is not a worry," he said.
Last month, Galfar Engineering surprised investors by posting a meagre growth of 3.05 per cent net profit in first nine months of 2008 and 42 per cent decline in third quarter of 2008.
The company stock price has taken a severe beating since then, and yesterday hit a low of 597 baizas, below the 600 baizas IPO price.
The weak regional sentiment dragged MSM below the 6,000 mark and the index lost 2.29 per cent to close at 5,924 on volumes of nearly six million shares.
According to Sunil Dhall, Vice President of Gulf Baader Capital Market, the fall in oil prices to under $34 on Friday weighed heavily on the markets. He expects oil prices to bounce back in January and regional markets to follow.
According to the Dhall the local market is heavily oversold and there was news of CRR cut by CBO and increase in lending ratio. Market participants expect sentiment to improve in coming days and the MSM to bounce back above 6,000 levels.
He said that the company's results in the third quarter ... had no impact on the declining share price.
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