MSX index posts weekly losses amid selling pressure

The main index of the Muscat Stock Exchange (MSX) posted nearly one per cent loss during the last week, mainly due to selling pressure in the financial and industrial stocks.

MSX30 Index ended the week lower by 0.98 per cent at 4,751.49 points. Among sectoral indices, Financial Index lost 1.80 per cent for week while Industrial Index dropped 2.98 per cent. However, Service Index was up for the week by 2.55 per cent. The MSX Shariah Index closed lower by 0.61 per cent.

Local news

▶bank Muscat’s board of directors on Tuesday approved the bank's financial results for the year ended December 31, 2022. The board proposed a 15 per cent cash dividend for the year 2022. Bank Muscat shareholders would receive a cash dividend of 15bz per ordinary share aggregating to Ro112.596mn on the bank's existing share capital. The proposed cash dividend is subject to the formal approval of the annual general meeting (AGM) of the shareholders and regulatory authorities. The bank's Capital Adequacy Ratio (CAR) after the cash dividend payout will be 21.25 per cent which is well above the regulatory minimum. ▶taageer Finance board approved the audited financial statements for the year ended December 31, 2022. The board recommended a cash dividend of 5 per cent and stock dividend of 2 per cent for the year 2022 and appointed Krishnan Raman as the secretary to the board. The financial statements and dividend are subject to approval of Central Bank of Oman and the shareholders in the AGM of the company.

▶ahlibank announced a net profit of Ro33.09mn for the year ended 2022 compared to Ro27.61mn in 2021, an increase of 19.8 per cent. Based on the results achieved, the board of directors of Ahlibank has proposed a cash dividend of 9 per cent (9bz per share). The unaudited financial statements are subject to Central Bank of Oman and shareholders' approval.

▶oman’s average daily production of crude oil and condensates exceeded 1.06mn barrels per day (bpd) for the full year 2022, up by 9.6 per cent in comparison to average daily output of 971,200 bpd recorded in 2021. The sultanate’s total oil production in 2022 increased by nearly 10.5 to 388.4mn barrels compared to 354.5mn barrels in 2021, according to data released by the National Centre for Statistics and Information (NCSI). Of the total production, crude production grew by 12.8 per cent to 309.5mn barrels in 2022 from 274.4mn barrels in 2021, while condensates output decreased by 1.4 per cent to 78.9mn barrels during last year against 80mn barrels in 2021. Total oil exports for the full year 2022 grew by 10.6 per cent to 319.5mn barrels in comparison with 288.9mn barrels in the previous year, the NCSI data showed. ▶abraj Energy Services – part of OQ Group – announced last week its intention to proceed with an initial public offering (IPO) and listing on the Muscat Stock Exchange (MSX), which is expected to take place in March 2023. The offering, representing up to 49 per cent of Abraj's total issued share capital, amounts to the divestment of shares currently held by the selling shareholder, OQ. A minimum of 51 per cent shareholding will continue to be indirectly held by OQ.

▶centralised Utilities Company (Marafiq), a joint venture owned by OQ and Gulf Energy Development Corporation of Thailand, signed a memorandum of understanding (MOU) with Siemens Energy, to cooperate in the fields of innovation in the energy and water sectors. The MOU provides opportunities to work on advanced technologies, research and development and accelerate the local Omani capabilities and knowledge in line with Oman Vision 2040.

GCC markets

Kuwait saw its consumer prices on annual basis grew by 3.15 per cent by the end of 2022 compared with the year before, according to the State of Kuwait Central Statistical Bureau (KCSB). The bureau, in a report to state news agency KUNA issued during last week, said that inflation rate rose 0.17 per cent in December on monthly basis due to increase of prices of all main groups that influence movement of the key indices particularly food and education.

Saudi Arabia’s overall merchandise exports increased by 3.6 per cent in November 2022 compared to the previous year with the value of exports hitting

SAR112.8BN (Us$30.3bn), up from the previous year's figures of SAR109BN, according to data released by General Authority for Statistics (GASTAT). According to GASTAT, this increase was mainly due to oil exports, which rose by SAR9.5BN or 11.8 per cent in the same period, increasing to SAR90BN from SAR80.5BN in November 2021, it stated.

However, Saudi Arabia's non-oil exports (including reexports) fell in November last year by 19.7 per cent, compared to the year before, decreasing to SAR22.7BN from SAR28.3BN. The kingdom's merchandise imports increased by 26.5 per cent in November 2022. The value of imports amounted to SAR62.7BN in November 2022 compared to SAR49.6BN in November 2021, it added.

Brazil's total exports to the Arab world witnessed a staggering growth last year, climbing to Us$17.743bn in 2022, according to the Arab Brazilian Chamber of Commerce (ABCC). Brazil's imports from the region have touched Us$15.037bn in 2022. Brazilian exports to Saudi Arabia witnessed a growth of 41.26 per cent from Us$2.070bn in 2021 to Us$2.925bn in 2022. Similarly, exports to the UAE increased by 40.09 per cent, from Us$2.327bn in 2021 to Us$3.260bn in the following year.

Global developments

The US economy likely maintained a strong pace of growth in the fourth quarter as consumers boosted spending on goods, but momentum appears to have slowed considerably towards the end of the year, with higher interest rates eroding demand. The Commerce Department's advance fourth-quarter gross domestic product report could mark the last quarter of solid growth before the lagged effects of the Federal Reserve's fastest monetary policy tightening cycle since the 1980s kick in. Most economists expect a recession by the second half of the year, though mild compared to previous downturns. Retail sales have weakened sharply over the last two months and manufacturing looks to have joined the housing market in recession. While the labour market remains strong, business sentiment continues to sour, which could eventually hurt hiring.

US mortgage rates fell for the third consecutive week, driving up demand for home loans. The Mortgage Bankers Association (MBA) reported the average rate on a 30-year, fixed-rate conforming mortgage (up to US$726,200) last week was 6.20 per cent, down from 6.23 per cent the week before and the lowest it’s been since September. The falling rates helped boost loan applications by 7 per cent. Applications for refinancing, which are especially influenced by borrowing costs, shot up 15 per cent. Applications to purchase a home increased by 3 per cent.

South Korea plans to scrap a number of regulations in the local stock market within this year to make investment easier for foreign investors, its financial regulator said last week, in an effort to bring in more money into the market.

Recommendation

Global markets are somewhat continuing on the positive trajectory from the start of the year, supported by 2022 results announcements and other macroeconomic data. However, uncertainty on the US Fed’s rate actions continue to weigh on the market sentiment.

Regionally and locally, markets are also reacting to result announcements for the recent year end. We advise investors to read full financial statements of the companies as and when they are disclosed, to learn more about the companies’ plans and outlook for 2023.