MSM30 up as market turns active again

The benchmark started the previous week on negative performance on ex-dividends trades especially on companies, which held their AGMS after the trading hours of the last day in the week earlier. Later, the market reversed its downward trend getting support from positive macro news and regulations. Such factors include the CBO revision of some key banking regulations to support liquidity and credits, the strong position of foreign currency reserves in Oman, the continuity of large investments in free zone areas in addition to investors hunt for undervalued stocks.

The MSM30 ended the week up by 0.53 per cent at 4798.90. Both the Financial and Services indices increased by 2.42 per cent and 0.81 per cent respectively while the Industrial Index closed down by 0.35 per cent. Shariah Index closed down by 0.7 per cent.

In line with our earlier estimates about the market activities, the first week of April was active as the average daily volume and value was up by 45.4 per cent and 81 per cent respectively compared with the 1Q’18.

It is worth stating that MSM30 performance in March’18 was the worst on monthly basis since June in 2017 when the regional geopolitical tensions between Qatar and other countries started to affect the investment sentiment. The MSM30 dropped by 4.59 per cent in March 2018.

Omantel announced that it has mandated international and local financial institutions to organise a series of fixed income investor meetings in Dubai, London, New York and Boston to shed light on the bond to be issued by Oztel Holding. These meetings will commence on April 8, 2018. The company looks to fund its current $1.45 billion bridge loan, which was previously obtained to finance part of its 21.9 per cent Zain acquisition, through 5 and 10-year bonds.

In the weekly technical analysis, as we mentioned last week that MSM30 index is likely to touch up the level of 4,820 points. Technically we believe that MSM index currently move in upward channel and we notice that this channel is leaning close to the vertical direction this means that this rise will be not continue and even any moment we can see a profit taken.

During last week, Ubhar Capital SAOC updated its “Ubhar Capital Oman20 Index”. The index witnessed the addition of Al Jazeera Services, Oman Fisheries and Al Suwadi Power and the deletion of Al Ahli Bank, Gulf Investment Services and Oman United Insurance. Accordingly, the market cap of this index is about RO 4.64 billion (representing 61.1 per cent of the total market capitalisation at the end of 2017).

The Central Bank of Oman said that the country has the means to maintain its currency peg and has no plans to change it despite decline in oil prices.

The Executive President added that Oman’s gross foreign currency reserves, which stood at $19.6 billion at the end of January, are enough to cover around nine months’ worth of imports. He added that the country is doing efforts to make the business environment more attractive to both locals and foreigners. According to him, new commercial companies and investment laws are in the pipeline, and other legislation, such as a bankruptcy law, are under discussion

According to the CEO of the Public Establishment for Industrial Estates, it is expected that around $1 billion to be invested in Sur Industrial Estate by this year end. So far, the total investments within the seven industrial areas under the Public Establishment for Industrial Estates in addition to Mazyona free zone and Knowledge Oasis Muscat stand at RO 6.32 billion as of 2017. Out of these, 48 per cent are nonomani investments and 52 per cent are Omani investments as per same sources.

Recent data about telecom subscribers revealed that total mobile subscribers stood at 6.8 million in February 18, down by 2 per cent compared to 2017 mainly on lower pre-paid mobile subscribers’ base. Pre-paid mobile subscribers formed 90.2 per cent of the total mobile subscribers.

On the other hand, the active mobile broadband subscribers saw a decline of 5.4 per cent during the same period at 4.1 million. Healthy growth was seen in the total Internet subscribers as they increased by 19.1k subscribers, i.e. 5.4 per cent in February 18 compared to end of 2017.

Among the GCC financial markets, Qatar Exchange was the best weekly performance as it closed up by 2.55 per cent followed by Abu Dhabi Securities Exchange (+2.25 per cent) while Bahrain Bourse was the worst ending down by 2.69 per cent.

The Capital Market Authority in Saudi Arabia had approved the listing of local currency government bonds on the Saudi Stock Exchange. According to the same CMA, over 204.4 billion riyals ($54.5 billion) of riyal bonds would be available to trade. The main goal from this step is to support secondary market trading of debt and expanding ownership beyond banks to insurers, mutual funds and even individual investors. Such move will strength the general budget of the country.

The Kingdom of Saudi Arabia has closed $16 billion syndicated loan that refinances a $10bn facility signed in 2016.

The deal comprises of $8.35 billion term loan and a $7.65 billion murabaha financing. Pricing on the deal is 30 per cent lower than on the original loan, which paid 120bp over Libor, bringing pricing on the new deal to 84bp over Libor. (Courtesy: U-capital)