Muscat Stock Exchange posts growth in first quarter of 2021
Muscat Stock Exchange (MSX) posted a positive performance by the end of the first quarter of 2021 (Q1-2021).
MSX main index added 50 points and closed at 3708.71 points, thus breaking the chain of negative performance that shackled the stock exchange since the first quarter of 2017.
The value of traded securities surged dramatically by 143 per cent to OMR85.79 million.
The proportion of companies that disclosed their results stood at 95 per cent. As many as 70 firms made profits. The overall gains aggregated at OMR154 million, with 55 per cent of the total number of companies posting growth in their results in 2021.
The positive figures came as a result of gains made in March 2021 when oil prices started recovering and stabilising at a rate of $60 per barrel. This also coincided with the announcement of the Economic Stimulus Plan and the steady rate of COVID-19 vaccination.
Dr Salah A-Talib, an economic and securities expert at MSX, said
that the major improvement in oil prices was among the salient features of the positive outlook during the first quarter’s results in 2021 (compared to the corresponding period last year) because the majority of business activities—including MSX-listed joint stock companies—are bound by oil
revenues. “This is a typical feature of Omani economy since every improvement in oil prices reflects positively on the overall economic activity,” Dr Saleh added.
He explained that the outbreak of coronavirus during the first quarter last year (2020) had a major negative impact on economic activities,
including the associated lockdowns, unlike the moderated situation in the first quarter this year (2021) and the ‘protective’ decisions that reflected positively on the performance and profitability of firms.
Hafeedh Al-Ghazali, financial analyst at Ubar Capital Company, said that total profits at the stock market grew by 87 per cent on a quarterly basis and overtook last year’s Q1 results by 34 per cent. He explained that the financial sector’s performance was the highest in terms of profits on an annual basis and a quarterly basis at rates of 33.4 per cent and 52 per cent, respectively.
Al-Ghazali forecast slower growth for the second quarter due to the holy month of Ramadan and the current circumstances that might slow down the process of growth during the second quarter. He expected a similar slow growth rate in the banking sector, but a positive performance rate in the financing sector.
Talal Al-Qadhi, Assistant Head of Stock Markets’ Investment Sector (at Tanmia company), said that sectors expected to register a good performance among MSX-listed firms include construction companies. These, he explained, benefited from the suspension of supplies from international logistics companies during the COVID-19 high period, coupled with curbs on imports of other companies meant to stem market saturation. This resulted in the industries’ sector closing at 4621.4 points, up by 7.5 per cent by the end of the first quarter, he added.
Al-Qadhi pointed out that the sectors of banks, insurance and investment registered a very high performance, with the financial sector adding 48 points by the end of the quarter due to a variety of mechanisms that prompted this upward trend, including incentives announced by the Central Bank of Oman and the low rate of insurance claims due to traffic lockdowns over the past period.
The services sector lost 47 points due to adverse circumstances, said Al-Qadhi, who expected that the forthcoming period is expected to witness an inflow of more liquidity.
He added that one of the priorities of the next stage of MSX is to step up direct foreign investment attraction efforts by providing a host of incentives and establishing an appropriate climate to promote the Sultanate as an attractive investment destination.