MUSCAT: In the first half of this year, the Muscat Stock Exchange (MSX) saw the listing of new bonds and sukuk worth RO 362.400 million, issued by the Central Bank of Oman, local banks, and various public joint-stock companies.
The MSX aims to stimulate trading activity by diversifying its investment instruments, encouraging both corporate and individual investors to expand their investment portfolios. Currently, the exchange lists 36 bond issues, including 16 government development bonds, and 13 sukuk issues, of which 6 are sovereign sukuk.
Bonds are debt instruments used by governments or companies to borrow funds, pledging to pay holders a fixed interest over the bond’s duration and to return the bond's nominal value upon maturity. Some companies convert bonds into shares to bolster their capital. Sukuk, on the other hand, are financing instruments compliant with Islamic Sharia, providing profits to their holders from the issuing entity. Listing these instruments on the exchange allows holders to sell them before maturity and enables other investors to purchase them and benefit from the profits.
In the first half of the year, significant bond listings included government development bonds: Issue No. 69 (RO 100 million) and Issue No. 70 (RO 125 million). Additionally, the Omani International Development and Investment Company (Ominvest) issued free bonds worth RO 13.300 million, convertible into ordinary shares after three years, distributed as non-cash dividends to shareholders at a rate of one bond for every five ordinary shares owned.
In the banking sector, the National Bank of Oman issued free bonds worth RO 10.300 million, compulsorily convertible into shares, listed on the MSX on May 6. The finance sector saw the National Finance Company issuing permanent unsecured secondary bonds worth RO 35 million, while the Omani Company for Financing Services issued free unsecured bonds worth RO 1.500 million, redeemable after five years but not convertible into shares. In the insurance sector, Liva Group issued bonds worth RO 4.700 million, convertible into ordinary shares after three years and listed on June 5.
Dhofar Insurance Company restructured its bonds, reducing the size from 20 million to 10 million bonds with a nominal value of 100 baisas per bond, following the General Assembly's decision to convert part of the bonds into shares. Consequently, the MSX reduced the number of Dhofar Insurance Company bonds listed starting June 2, until their maturity on June 30, 2025.
In the sukuk sector, the MSX listed Tilal sukuk worth RO 55.900 million and the third issue of Meethaq sukuk worth RO 16.500 million during the first half of the year.
At the end of June, the total market value of the bonds and sukuk market stood at RO 4.355 billion, a decline of RO 76.100 million from the end of last year. This reduction followed the cancellation of bond listings worth RO 120 million, including perpetual bonds issued by Sohar International Bank (RO 100 million) and the National Bank of Oman (RO 20 million) in 2019, as both banks chose to redeem these bonds.
The bonds and sukuk market represents approximately 18 per cent of the total market value of securities listed on the MSX, which amounted to RO 24.280 billion at the end of June.
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