Oman central bank plans to issue $389 million worth of bonds

Oman’s central bank plans to float $389 million worth of government development bonds towards the end of the year.

  
Counterfeit U.S. dollar notes are displayed during a media conference in Lima April 17, 2013. REUTERS/Enrique Castro-Mendivil

Counterfeit U.S. dollar notes are displayed during a media conference in Lima April 17, 2013. REUTERS/Enrique Castro-Mendivil

Reuters/Enrique Castro-Mendivil
19 October 2016
A. E. James
Muscat - Oman’s central bank plans to float OMR150 million worth of government development bonds towards the end of the year for raising funds to repay a maturing bond issue.

“This is replacement for an issue, which is expiring by the end of the year,” Hamoud Sangour Al Zadjali, executive president of the Central Bank of Oman (CBO), told journalists on the sidelines of a workshop on IFRS standards organised by Horwath MakGhazali, auditors and management consultants practicing in Muscat and a member firm of Crowe Horwath International.

Quoting the minister responsible for financial affairs, Al Zadjali also said that the Oman government will not issue bonds in the international market this year. “Probably (there could be an issue) next year, depending on the budget.”

The CBO chief added that the central bank has raised OMR300 million by way of development bonds so far this year and the forthcoming bond issue will take the total amount raised by way of development bonds to OMR450 million.

Overseas markets

The Oman government has been raising funds by way of development bonds within the country and bond issues in the overseas markets.

He also noted that there has been an overwhelming response to development bond issues so far this year. “All these issues were oversubscribed — may be two or three times sometimes. It means that there is enough liquidity in the system.”

Al Zadjali also noted that CBO’s move to raise funds from the local market had not affected the liquidity situation so far because “we also watch the liquidity situation.”

“We have a joint committee with members from the Central Bank of Oman and the Ministry of Finance, to look at the liquidity situation in the banking sector and accordingly decide on these issues,” the CBO chief explained.

Merger

Fixing a time frame to conclude mergers will be in the best interest of respective companies as well as the financial system as a whole, said Hamoud Sangour Al Zadjali, executive president of the Central Bank of Oman (CBO).

“That (a merger) should not take such a long time. It affects the institutions themselves because there is no clarity on what will be the future of these institutions. It is detrimental to these institutions to stay that long in taking a decision (on merger),” Al Zadjali told journalists on the sidelines of an IFRS 9 workshop.

Two leading Omani banks - Bank Dhofar and Bank Sohar - called off their proposed merger on Sunday.

The Sultanate’s banking regulator – Central Bank of Oman – has been encouraging consolidation of financial institutions in an apparent move to make strong entities to withstand competition.

© Times of Oman 2016

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