Where does the Omani stock market stand?

Oman's national economy remains heavily reliant on the oil and gas sector for annual government revenues, supplemented by other fiscal measures, most notably taxes on private-sector companies and institutions. However, there is a growing need to diversify income sources by leveraging other economic sectors such as mining, fisheries, agriculture, and tourism. This diversification is essential to strengthen the national economy and reduce reliance on oil revenues.

The stock market has become an integral component of this diversification strategy in Oman and across the region. Positive developments have been witnessed in this sector, particularly with the listing of shares from government-owned companies and public institutions as part of the government's privatization policy. Officials believe this strategy will enhance non-oil economic activity, attract foreign investments, and boost trading activity in the Muscat Stock Exchange (MSX).

Over the past two years, Oman has introduced shares of several government companies, with more offerings planned in the near future. This has contributed to a 20.4% increase in trading value in the MSX during the past year, signaling a recovery in market activity after years of decline. The downturn was primarily caused by the global drop in oil prices and the economic challenges brought on by the Covid-19 pandemic.

Reports suggest that Oman's capital markets are well-positioned to play a pivotal role in achieving the goals of Oman Vision 2040. The country is implementing extensive legislative reforms and strategic shifts to accelerate private sector growth and flexibility. These efforts aim to open new investment opportunities, improve financial sustainability, and address challenges in the capital markets.

Updated regulations are expected to promote the expansion of Sharia-compliant instruments such as Islamic bonds and sukuk, further bolstering the capital market. These efforts align with Vision 2040 objectives to enhance market efficiency, increase liquidity, and foster partnerships between public and private sectors. Such initiatives will ease the fiscal burden on the government and create an environment conducive to private sector development.

The recent listing of OQ Exploration and Production (OQEP) shares exemplifies the market's growth. Within a month, trading value from this listing alone reached approximately RO 200 million, representing 20% of the total trading value for 2023. This strong demand reflects growing investor confidence in the MSX and its prospects.

The upcoming phase will see additional offerings of government shares, underscoring their role in attracting both domestic and foreign investments. These measures aim to achieve economic diversification, foster a culture of savings, and support long-term financial sustainability in Oman.

By enhancing investment opportunities and strengthening the capital market's role, Oman is steadily progressing toward its Vision 2040 goals, paving the way for a more diversified and resilient economy.