MUSCAT: Abdullah bin Salem al Salmi, Executive President of the Capital Market Authority (CMA), confirmed that the listings of the Muscat Stock Exchange (MSX) in the past period, especially the listing of 49 per cent of the shares of Abraaj Company and OQ Gas Networks Company, will undoubtedly help in activating the role of the capital market as an effective tool for financing economic projects, and enhances investor confidence in the economy as the Omani capital market is boosted by the high demand of domestic and foreign investors.
In a statement to Oman News Agency (ONA), Al Salmi said that these listings will contribute to injecting new liquidity into the MSX, increasing trading volumes, and deepening the stock exchange. This will help in better pricing of traded securities and attract new companies to list in it.
“The CMA is working to establish regulatory and procedural frameworks that facilitate and assist enterprises and companies dealing with the market on the one hand, protect investors and dealers on the other hand, maintain market stability and enable it to play its desired role in serving the economy and society.”
The Authority has put forward a number of initiatives to activate the role of the capital market and the institutions operating in it, represented by crowdfunding, market making, liquidity providers, lending and borrowing securities, marginal financing, creating a special market for promising companies, tripartite governance, the liquidity fund, green financing and other initiatives, in coordination and cooperation with the financial sustainability and development programme.
The financial sector ‘Estidama’ granted approval to two companies to practice market making activity. With the aim of providing liquidity in securities and maintaining a state of balance between supply and demand, Al Salmi expressed his hope that large companies listed on the stock exchange will appoint liquidity providers and market makers to provide liquidity and maintain price stability.
He pointed out that the Omani Investment Authority’s programme includes offering a number of its subsidiaries and preparing them for public subscription, and he expects that a timetable for offering a number of companies will be announced in the near future, noting that there is talk about offering Majis Industrial Services and Oman Shipping Company for public offering.
Al Salmi expressed the hope that he would see new subscriptions for companies of appropriate sizes such as OQ and looks forward to the continued momentum created by recent issues so that the capital market will be used by the Government and the private sector as a tool to finance large projects and increase the issuance of diversified products listed on the MSX in the next phase, calling family and private companies in Oman to be listed on the stock exchange for the sustainability and governance of these companies.
The Authority is also working in cooperation with the MSX and through the ‘Sustainability’ programme to upgrade the Muscat Stock Exchange from a ‘start-up market’ to an ‘emerging market’, which is a necessary requirement to place the stock exchange on the radar screens of global investors, and encourage them to invest in the Sultanate of Oman.
He said that what lacks the exchange to reach that level is liquidity and the volumes of listed companies, as the exchange needs two or three companies of large size.
He confirmed that the size of the stock market constituted only 19 per cent of the GDP according to 2022 statistics, which is a small percentage compared to the average ratio of the size of the market value of the GCC countries to the GDP, which amounted to about 163 per cent in 2022. The market value of the stock exchange represented 0.22 per cent of the total market value of the stock exchanges of the GCC countries. — ONA
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