‘Listed firms need to boost disclosure’
The market regulator has been encouraging closelyheld companies, especially familyowned businesses, to list their shares on the local bourse.
Omani companies listed on the Muscat bourse need to strengthen transparency and disclosure to attract more local and foreign funds to the market, which will help to boost trading volumes.
“Whatever happens to the public companies should be disclosed to the investing public. At the end of the day, the public has to take the right decision, whether to buy, sell or hold. The investing public needs to get the information on a timely manner,” said Sheikh Abdullah bin Salim Al Salmi, Executive President of the Capital Market Authority (CMA). He was talking to the media on the sidelines of a conference on disclosure in capital markets.
“Disclosure is a major factor that enhances trading volumes,” he said, adding; “We suspend trading (of companies that violate disclosure norms), until the company fully disclose the information. There are penalties and it could be a criminal case sometimes.”
Sheikh Al Salmi also said that listing of state-owned companies would strengthen efficiency and profitability of these companies. “Bringing them to the market will definitely enhance efficiency, the way they do their business, profita- bility and sustainability,” he added.
The CMA chief also said that the market regulator has been encouraging closely-held companies to list their shares on the bourse. “This will ensure the sustainability and continuity of state-owned companies.”
Sheikh Al Salmi said that he would like to see more large companies listing shares on the market, which will boost traded volumes.
After a series of disciplinary actions against companies, especially suspension of trading, the managements are now more careful while disclosing information.
CMA strives to ensure timely, factual, transparent and complete disclosure of the material information by listed entities.
Of late, trading in several companies, including few blue chip stocks, were suspended briefly on lack of complete information while disclosing board decisions and information related to contracts.
The disclosure guidelines of the Oman bourse are much more prudent than some of the regional markets.
MSM was the first regional bourse that introduced disclosure of financial results on a quarterly basis, which is at par with international standards. As many as 135 companies and bonds are listed on the Muscat bourse.
Experts presented papers on the importance of disclosure, financial statements in taking investment decisions and on IFRS standards at the conference, which was organised by the Capital Market Authority.
Mohammed Said Al Abri, acting Vice President, Capital Market Sector at CMA said that the authority attaches special attention to disclosure and transparency for being the key principles heeded by stock markets and investment funds and institutions and investment banks locally and globally which is considered the backbone of any financial market due to the important role in mitigating the risks and curbing price volatility.
“The legislations regulating the Omani capital market support this policy adding that apart from the laws and regulation compliance therewith by all the relevant parties is the key issue as it gives an indication of the market’s efficiency, reliability, confidence, maturity, risk and fairness in dealing with the various segments of investors to protect the rights of market participants,” he added.