Cau­tious sen­ti­ment weighs

Oman Daily Observer - - INSIDEOMAN -

The fi­nan­cial mar­ket re­mains cau­tious and watch­ful, which af­fected trad­ing vol­umes and val­ues. A num­ber of re­sult an­nounce­ments, cou­pled with re­gional pres­sure, con­trib­uted to in­creased losses in the re­gional fi­nan­cial mar­kets, in­clud­ing lo­cal. MSM30 went down by 0.8 per cent on a weekly ba­sis. The Fi­nan­cial In­dex closed down by 1.38 per cent fol­lowed by the In­dus­trial In­dex (-1.1 per cent) and the Ser­vices In­dex (-0.89 per cent). The MSM Shariah In­dex closed down by 1.02 per cent w-o-w.

Aim­ing to sup­port the trad­ing ac­tiv­i­ties, the MSM Board ap­proved to ex­tend the daily trad­ing ses­sion to four hours, start­ing from 10 am to 2 pm. This comes at the re­quest of bro­ker­age firms. The ex­ten­sion will be for a trial pe­riod of six months start­ing next month. The daily av­er­age turnover in the 9M’18 stood at RO 3.4 mil­lion which is 7.5 per cent lower on yearly ba­sis.

SMN Power Hold­ing stated in a state­ment to the MSM that a small fire broke out in the Load Volt­age (LV) switchgear room at the Barka II plant. The es­ti­mated fi­nan­cial im­pact to date amounts to RO 200,000 be­cause of shut­ting down of the de­sali­na­tion plant. Re­fer­ring to a pre­vi­ous dis­clo­sure re­gard­ing the op­er­a­tions of the Barka II de­sali­na­tion plant af­ter fire broke out in the Load Volt­age (LV) switchgear room, SMN Power Hold­ing re­ported that the plant was op­er­a­tional on Oc­to­ber 8, 2018 and that the ex­pected fi­nan­cial loss due to this event is about RO 385,000.

In the weekly tech­ni­cal anal­y­sis, as we men­tioned last week that MSM in­dex cur­rently near the level of (4,500 points) will push the in­dex to the level of 4,460 points. In the com­ing trad­ing, we ex­pect the pres­sure on the lead­ing stocks to con­tinue un­der pres­sure from neg­a­tive in­di­ca­tors.

To­tal an­nounced 9M’18 ini­tial net earn­ings so far, as per MSM, for the com­pa­nies whose year ends in De­cem­ber showed a net loss of RO 5.8 mil­lion mainly on Dho­far Int. Dev. & Inv. Hold­ing Co. (DIDI) which posted un­re­alised loss on fi­nan­cial as­sets at fair value and Salalah Port Ser­vices which was hit by the Cy­clone Mekunu. Ex­clud­ing those two com­pa­nies, net earn­ings would be up by 175 per cent to RO 30.7 mil­lion thanks to good re­sults posted by Re­nais­sance Ser­vices.

Sec­tor wise, the Ser­vice Sec­tor posted best re­sults as its net profit stood at RO 10.4 mil­lion for 9M’18 ver­sus a net loss of RO 8 mil­lion in 9M’17 on bet­ter per­for­mance by Re­nais­sance Ser­vices as the com­pany moved to prof­its from losses. The In­dus­trial Sec­tor to­tal net earn­ings de­clined by 23.2 per cent on an­nual ba­sis to RO 17.6 mil­lion mainly pres­surised by Al An­war Ce­ramic and Voltamp En­ergy. On quar­terly ba­sis, the to­tal mar­ket an­nounced re­sults in­di­cates a net loss of RO 0.868 mil­lion in 3Q’18 com­pared to a net loss of RO 3.1 mil­lion for 3Q’17. We would like to high­light here that so far not many large cap com­pa­nies have an­nounced the re­sults.

In a step to at­tract more for­eign di­rect in­vest­ments, Nama Hold­ing, a govern­ment-owned hold­ing com­pany, an­nounced the launch of a pri­vati­sa­tion pro­gramme for Nama Group’s elec­tric­ity trans­mis­sion and distri­bu­tion com­pa­nies. Dur­ing press con­fer­ence in Lon­don, the com­pany stated that the par­tial pri­vati­sa­tion of the trans­mis­sion com­pany and one of the distri­bu­tion com­pa­nies through an in­ter­na­tional strate­gic part­ner. The vice-pres­i­dent — distri­bu­tion and sup­ply at Nama Group an­nounced sale of upto 49 per cent of Nama Hold­ing shares in Oman Elec­tric­ity Trans­mis­sion Co (OETC), and the sale of up to 70 per cent of Nama Hold­ing shares in its distri­bu­tion and sup­ply com­pa­nies re­spec­tively: Mus­cat Elec­tric­ity Distri­bu­tion Co (MEDC), Ma­jan Elec­tric­ity Distri­bu­tion Co (MJEC), Ma­zoon Elec­tric­ity Distri­bu­tion Co (MZEC), and Dho­far Power Co (DPC).

The Un­der-sec­re­tary of the Min­istry of Oil and Gas said that Oman has the ca­pac­ity to raise the ceil­ing of its oil pro­duc­tion by about 40K bar­rels per day, a share that was pre­vi­ously re­duced in ac­cor­dance with the agree­ment with the oil pro­duc­ing coun­tries from Opec and other pro­duc­ers.

As per CBO’S lat­est sta­tis­ti­cal bul­letin, the to­tal credit of the Omani Bank­ing sec­tor (con­ven­tional loans and Is­lamic fi­nanc­ing) stood at RO 24.27 bil­lion as at the end of July’18, up by 6.3 per cent YOY and flat on MOM ba­sis. To­tal de­posits stood at RO 22.28 bil­lion, up by 3.4 per cent YOY but down by 0.3 per cent MOM or RO 64 mil­lion from June to July’18. Credit growth (on YOY ba­sis) slow­down re­versed at the end of 2017 un­til April’18 and was slow­ing down un­til July’18 when it has once again be­gun to show signs of re­cov­ery. De­posit growth, on one hand, had picked up markedly from a low of 2.3 per cent in April’18, to 4.5 per cent YOY in June’18 but has once again fallen to 3.4 per cent YOY in July’18. To­tal Loan-to-de­posit Ra­tio re­mains stretched at 108.9 per cent.

Con­ven­tional banks ac­count for 86.0 per cent of to­tal sys­tem credit at RO 20.88bn as at the end of July’18, ris­ing by 4.1 per cent YOY and de­clin­ing by 0.3 per cent MOM. Credit ex­tended to the pri­vate sec­tor re­mained sta­ble on MOM ba­sis at RO 18.59 bil­lion. Con­ven­tional de­posits at RO 19.19 bil­lion (+1.8 per cent YOY, flat on MOM ba­sis) form 86.12 per cent of the to­tal bank­ing de­posits of Oman. Con­ven­tional Loan-to-de­posit ra­tio stood at 108.8 per cent. Is­lamic credit stood at RO 3.39 bil­lion (+21.7 per cen­tyoy, +1.9 per cent MOM) and Is­lamic de­posits stood at RO 3.09 bil­lion (+14.5 per cent YOY, -1.8 per cent MOM), with Loan-to-de­posit ra­tio stretch­ing to 109.5 per cent in July’18 from 105.4 per cent in June’18, due to RO 58 mil­lion worth Is­lamic de­posit with­drawal dur­ing the month of July’18.

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