Oman CMA lowers minimum share offer of insurance firms

National insurance companies can offload a 25% stake of promoters, instead of the normal 40% disinvestment in IPOs

Oman CMA lowers minimum share offer of insurance firms
20 March 2017
A E James
Muscat: Oman’s stock market regulator, Capital Market Authority (CMA), has approved a request from national insurance companies to offload a 25 per cent stake of promoters, instead of the normal 40 per cent disinvestment in initial public offerings.

At least five national insurance companies — Al Ahlia Insurance Company, National Life Insurance, Oman and Qatar Insurance, Vision Insurance and Falcon Insurance — are expected to float shares on the Muscat Securities Market (MSM) before August 2017, in line with the CMA regulation. 

The recent mergers of some insurance companies have reduced the number of firms required to float shares on the local bourse, Sheikh Abdullah bin Salim Al Salmi, executive president of the CMA, told Times of Oman.

“For example, Muscat Insurance and Muscat Life Insurance are merging with Muscat Holding. Since Muscat Holding is a listed company, there is no need for these two insurance companies to float shares on the market,” added Sheikh Al Salmi.

In 2014, the Omani government had asked national insurance firms to float shares on the MSM within three years, along with raising their minimum capital to OMR10 million from OMR5 million. Also, insurance firms must comply with all listing requirements, and promoters will have to divest a minimum of 25 per cent in favour of investors.

“The good thing about the insurance companies is that most of them are working with one issue manager, as the time available for offloading shares is short. The issue manager is now working with the CMA to see how they can schedule the issues,” added the CMA chief.

Although the Sultanate has 22 insurance companies (11 locally incorporated and 11 branch operations of foreign firms), only four companies — Dhofar Insurance, Oman United Insurance, Al Madina Takaful and Takaful Oman — are listed. Of these, Al Madina Takaful and Takaful Oman are Islamic insurance firms.

The new listings will mark a new chapter in the Omani insurance sector, as local companies will be able to withstand competition by strengthening their financial, technical and human resources. A higher capital base will result in these institutions being large enough to underwrite more risks and retain premiums within the country.

Mining Development Oman

Referring to the proposal to list the newly formed Mining Development Oman, Sheikh Al Salmi said the company is in the process of obtaining a licence from the Public Authority for Mining. Mining Development Oman, which will have a paid-up capital of OMR100 million, will offer 40 per cent of its stake to the investing public.

© Times of Oman 2017

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