FSA's incentives boost capital market for economic growth
Published: 04:08 PM,Aug 11,2024 | EDITED : 08:08 PM,Aug 11,2024
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MUSCAT, AUGUST 11
The Capital Market Incentives Programme, unveiled by the Financial Services Authority (FSA) here on Sunday, will focus on enhancing long-term financing options through the capital market, showcasing its potential to reshape how companies approach funding and market participation, said Shaikh Abdullah Salem al Salmi, Executive President – FSA.
In exclusive remarks to the Observer, Al Salmi articulated the core purpose of the Capital Market Incentives Programme: to empower the capital market to play a more significant role in the national economy. He pointed out that the programme aims to enable companies to leverage unconventional financing methods offered by the capital market. By doing so, it seeks to address a critical need for diverse financing sources, particularly for long-term projects that require stable and sustainable funding solutions.
Al Salmi noted that studies have consistently shown that financing through the capital market is often more cost-effective than traditional banking sector options. This is particularly advantageous for companies looking to invest in long-term projects, as the capital market can provide financing at lower costs, thus improving their financial viability.
The Executive President stressed that the programme's design is intended to highlight and maximize these benefits, encouraging companies to fully explore and utilize the available opportunities. Al Salmi underscored the importance of this shift, explaining that it aligns with broader economic goals by fostering a more dynamic and accessible capital market environment.
Another critical aspect Al Salmi discussed was the programme's objective to enhance market liquidity. He explained that as liquidity in the market improves, so does market activity, which in turn increases the flexibility for investors to enter and exit the market. This enhanced liquidity not only makes the market more appealing but also leads to better pricing of products listed on the exchange. Al Salmi emphasized that improved liquidity is crucial for the overall health of the market, as it supports more active trading and better price discovery.
Addressing concerns about the programme's timeline, Al Salmi reassured stakeholders that even companies that join in the final month of the five-year programme will still benefit from its incentives for an additional five years. He explained that the programme is structured to offer benefits over a five-year period, starting from now, and companies joining at any point within this timeframe would enjoy the program’s advantages for the full five years following their entry. Al Salmi expressed confidence that this duration is appropriate, providing ample time for companies to realize the program's benefits and for the program to achieve its objectives.
Al Salmi's remarks underscore the Authority’s clear vision for transforming the capital market into a more robust and effective financing tool. By emphasizing long-term financing benefits and improved market liquidity, the programme is positioned to make a substantial impact on the investment landscape in Oman. It is designed to not only attract local and foreign investments but also to deepen the capital market's role in the national economy.
The Capital Market Incentives Programme, unveiled by the Financial Services Authority (FSA) here on Sunday, will focus on enhancing long-term financing options through the capital market, showcasing its potential to reshape how companies approach funding and market participation, said Shaikh Abdullah Salem al Salmi, Executive President – FSA.
In exclusive remarks to the Observer, Al Salmi articulated the core purpose of the Capital Market Incentives Programme: to empower the capital market to play a more significant role in the national economy. He pointed out that the programme aims to enable companies to leverage unconventional financing methods offered by the capital market. By doing so, it seeks to address a critical need for diverse financing sources, particularly for long-term projects that require stable and sustainable funding solutions.
Al Salmi noted that studies have consistently shown that financing through the capital market is often more cost-effective than traditional banking sector options. This is particularly advantageous for companies looking to invest in long-term projects, as the capital market can provide financing at lower costs, thus improving their financial viability.
The Executive President stressed that the programme's design is intended to highlight and maximize these benefits, encouraging companies to fully explore and utilize the available opportunities. Al Salmi underscored the importance of this shift, explaining that it aligns with broader economic goals by fostering a more dynamic and accessible capital market environment.
Another critical aspect Al Salmi discussed was the programme's objective to enhance market liquidity. He explained that as liquidity in the market improves, so does market activity, which in turn increases the flexibility for investors to enter and exit the market. This enhanced liquidity not only makes the market more appealing but also leads to better pricing of products listed on the exchange. Al Salmi emphasized that improved liquidity is crucial for the overall health of the market, as it supports more active trading and better price discovery.
Addressing concerns about the programme's timeline, Al Salmi reassured stakeholders that even companies that join in the final month of the five-year programme will still benefit from its incentives for an additional five years. He explained that the programme is structured to offer benefits over a five-year period, starting from now, and companies joining at any point within this timeframe would enjoy the program’s advantages for the full five years following their entry. Al Salmi expressed confidence that this duration is appropriate, providing ample time for companies to realize the program's benefits and for the program to achieve its objectives.
Al Salmi's remarks underscore the Authority’s clear vision for transforming the capital market into a more robust and effective financing tool. By emphasizing long-term financing benefits and improved market liquidity, the programme is positioned to make a substantial impact on the investment landscape in Oman. It is designed to not only attract local and foreign investments but also to deepen the capital market's role in the national economy.