Bold move toward best practice in Oman’s capital markets
JOHN GOLLIFER*
The Muscat Securities Market (MSM) quietly made history when it formally introduced new investor relations requirements for listed companies. Under the regulation, companies listed on the MSM must appoint an investor relations officer and offer a dedicated investor relations section on their website.
With the new regulation, Oman acknowledged the instrumental role of efficient investor communications as an integral part of a well-functioning market and has firmly positioned itself among the most progressive markets in the region.
While the Sultanate is not the first country in the Middle East to drive the implementation of best practice in public capital markets, this move needs to be saluted. There is no doubt that MSM’s introduction of mandatory requirements for investor relations is a bold step. It says much about the leadership
position that stock exchanges hold as guardians of professional investor communications, an essential ingredient of successful market development anywhere.
At the same time, MSM’s move is much-needed and timely as a real demonstration of commitment to public capital markets and their value to the broader investment community. Casual observers might have reservations about putting pressure on a market that has been seeing a fair share of fluctuation following the collapse of crude prices. However, it is important to keep in mind that markets ebb and flow. To see MSM take a leap now can only enhance its reputation as a confident, professional market operator and contribute to building investor trust in the long run.
From the perspective of international investors looking at the region, the new regulation ingrains hygiene factors and serves to remind companies what it means to be public and the responsibility that this carries in capital markets. It is imperative to keep in mind that all companies are in the race for capital. Investors have choices where they can invest and accordingly, it is incumbent on the exchanges to promote market development.
MSM, in partnership with the Middle East Investor Relations Association (MEIRA), has marked a milestone with this regulation and, most importantly, set out the expectation of market change.
Of course, reality has taught us that – like all new regulations –it may take time to settle down. Some companies will be better prepared, and some will inevitably take longer to find the best way to address the new requirements. Time will tell what more can be done to encourage and enable compliance.
As the region’s only professional body in its field, MEIRA works across all the main markets with the various market operators, including exchanges and regulators, and has partnered with MSM to shape this landmark directive from the onset in 2017. MEIRA can only commend MSM’s determination and is committed to supporting this initiative in every way, not least in the further professionalisation of investor relations in Oman.
Wouldn’t it be great if more markets demonstrated such commitment to the bestpractice led development of their capital markets? After all, the benefits are tangible and far-reaching. For Oman, in the final spurt of its five-year Vision 2020 economic development plan, 2019 could be a genuine inflection point – not least due to MSM’s forward-looking regulation that is likely to translate into a more robust market sentiment.
* The author is the General Manager, Middle East Investor Relations Association (MEIRA)