Coming back of IPOs

Public offerings are one of the means of attracting local and foreign investments. This is how savings of the people are employed in investment vehicles. Therefore, countries and governments introduce public offerings of the assets they own. They do this to expand the investment base, stimulate the economy and bring modern technologies. It brings transparency by requirements of higher level of disclosures and auditing.

In the Sultanate of Oman also, the IPOs are not new. They are catalysts of the growth of the national economy. The government has sold some of its assets as public offerings. The private companies are also encouraged to be converted into a public shareholding. But the trend has changed recently due to certain reasons. This is why the idea of the Oman Investment Authority came up to deal with some of the assets of government-owned companies. The authority could help achieve certain goals of Oman's Vision 2040, and to promote economic diversification and attract foreign investments.

Perhaps the offering of 49 per cent of the shares of Abraaj Energy Services company for the public is a qualitative step which may help in supplementing some of the government efforts aimed at attracting investment. Abra`aj Energy Services is one of the companies of the OQ group. This is also the first government company to file for IPOs this year. This will lead to a massive increase in the economic diversification and the pace of its growth. It is expected to enhance citizens’ orientation to invest and add value to their savings.

There is no doubt that expanding the ownership base in government companies is part of the privatisation plan. This policy was formulated in the nineties. Many mechanisms were also made for the purpose.

The government is selling many of the companies owned by it, such as Omantel. Before that, it did the same thing with Oman Cement, Oman Flour Mills and other companies by offering their shares for public subscription. This has helped in attracting national and foreign investments. This approach will continue in the coming phase of development of the country in a more effective way. This will further enrich the national economy and strengthen the Muscat Stock Exchange.

The energy sector stands at the forefront of the economic development of the country. The companies of this vital sector are extremely important in the Muscat Stock Exchange. They rejuvenate the sector by their presence in the share market and keep the wheel of the economic growth of the country moving. They attract more investments from within the country and abroad. It is gratifying that the Saudi Fund, Royal Court Affairs, and Schlumberger Investment company have entered in the market to purchase stakes in Abraaj. It increases the confidence of all its investors. This is a model which is worth following by other sectors, particularly when it comes to attracting investments from abroad and expediting the development process of the country. This is an example of how a new approach is successfully tested in the markets and which brings high returns. This has also encouraged many other investors and those who have recently started showing interest in investment activity to enter into the area and explore more such opportunities and multiply their wealth.

This is why it is necessary that we focus on such models of investments to seriously move towards achieving the ultimate goals of Oman Vision 2040.

The mere entry of Abraaj into the Muscat Stock Exchange is highly encouraging for the shares of various public and private sector companies. It has shown that the market will feel rejuvenated and emboldened.

We hope that the ideas of bringing more and more IPOs will be successful in the near future. They will open up more avenues for those who are interested in investing their money from within the country or abroad. This is the ripe time for such activities in the country and a model has been set by Abraaj and the OQ group not only for the country to follow but the entire region.