MUSCAT: Muscat Stock Exchange (MSX) celebrates today, with the ringing of the bell to inaugurate the liquidity provider service, under the auspices of Abdullah bin Salem al Salmi, the CEO of the Capital Market Authority.
Omantel has appointed United Securities Company as the liquidity provider for its shares, while Bank Sohar International has appointed Ubhar Capital as the liquidity provider for its listed bank shares on the Muscat Stock Exchange.
Mustafa Ahmed Salman (pictured), Chairman of United Securities LLC, explained that the liquidity provider is essentially a trader who trades in large quantities of shares to help ensure that market participants can continuously buy and sell assets when they wish to do so. Liquidity providers perform important functions in the market, such as encouraging price stability, reducing volatility, and minimizing the spread between supply and demand, making trading more cost-effective.
He said in a statement to the Oman News Agency (ONA) that all these factors make the stock exchange more attractive and consequently attract investors. He pointed out that with the entry of liquidity providers into the Muscat Stock Exchange, the exchange will witness an increase in volumes and a gradual improvement in prices to their fair levels.
The accumulation and growth of these volumes will help the Muscat Stock Exchange raise its evaluation to the level of emerging markets, and in the event of entering this category, a group of international investments will enter the market automatically.
He added that liquidity provisioning operations for shares of any company fall within the standards, frameworks, governance, and control that impose strict conditions on the operations of the company operating as a liquidity provider, where the company commits to placing a large number of orders on the company to create market depth and provide different types of demand at various levels.
He pointed out that the active trading of the company's shares enables the required mechanics to reach the fair price of the company's shares, in addition to providing comfort to investors by having the possibility of entering and exiting the investment at their convenience. — ONA
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