Omani listed firms expected to maintain dividends at OMR350m

Dividend payout determined after considering regulatory requirements with regards to capital adequacy ratios

  
An investor talks on his mobile phone, whilst working on his computer, on the trading floor of the Muscat Securities Market (MSM) in the Commercial Business District of Ruwi in Muscat, October 2, 2007. Image for illustrative purposes.

An investor talks on his mobile phone, whilst working on his computer, on the trading floor of the Muscat Securities Market (MSM) in the Commercial Business District of Ruwi in Muscat, October 2, 2007. Image for illustrative purposes.

REUTERS/Stringer
31 January 2017
A E James
Muscat: Companies listed on the Muscat Securities Market are expected to maintain total dividends for 2016 at the previous year’s level of OMR350 million.

According to market sources, MSM 30 companies alone achieved a 16 per cent growth in net earnings at OMR630 million in 2016 and the payout of these major companies could be 50 per cent. “The dividend policy of banks for 2016 was similar to the previous year. The dividend payout was determined after considering regulatory requirements with regards to capital adequacy ratios,” said Kanaga Sundar, head of research at Gulf Baader Capital Markets. 

Industrial and services sector companies will also announce their dividends in line with the previous year.

As far as industrial firms are concerned, it is generally believed that debt-free companies can go for higher dividends. Besides, utility firms will also distribute higher dividends.

Scores of listed companies, including banks, leasing and hire purchase firms, oil marketing firms and utility companies, have already announced their dividend proposals for 2016.

As many as 130 companies are listed on the Muscat Securities Market, but a section of listed firms will not offer any dividend due to losses.

Suresh Kumar, head of research at Al Maha Financial Services, said the dividend payout of industrial firms will not be on par with last year due to lower earnings. “Banks are paying more or less the same or a slightly lower dividend compared to the previous year.”

Dividend yield

Suresh Kumar noted that the companies that are paying maximum dividend based on yields are Oman United Insurance, Al Maha Ceramics, Voltamp Energy, National Bank of Oman, Ooredoo, Oman Cement, Oman Cables, Bank Muscat, Ahli Bank and Oman Telecommunications Company.

“The dividend yield of leasing and hire purchase companies is very high, but the liquidity is poor, which is a hindrance for easy entry and exit,” added Suresh Kumar.

Traditionally, telecommunication, oil marketing firms and utilities (including electricity producers) have been the dividend pay masters in Oman.

Since majority of annual general meetings for giving approvals for dividend proposals are scheduled for March, investors will receive actual payment only by the first week of April.

Sundar said although net earnings of Omani firms were more or less in line with the previous year, the incremental participation of retail and institutional investors was not seen.

This is clearly reflected in the daily turnover of the local bourse, which has remained on the lower side at OMR3.4 million so far since the beginning of the year.

This is against a daily turnover of OMR3.9 million in 2016.

© Times of Oman 2017

More From Equities