Economy, govt spending to drive momentum: MSM

18/03/2013 08:06 AST

With investors who pulled out of the Oman bourse two years ago returning, the general index of the Muscat Securities Market (MSM) closed at its highest level in 22 months on Sunday.

Continuing its recent rally on the back of the buying spree by regional and other foreign institutional investors, the benchmark MSM30 index rose 0.81 per cent at 6,153.25 on Sunday, the highest level since May 16, 2011.

Speaking to Muscat Daily, Ahmed Saleh al Marhoon, director general of MSM, said that market liquidity and investor confidence have improved substantially.

He added, "We have seen local, regional as well as international investors return to invest in the MSM. As the sultanate's economy has shown good growth and MSM-listed companies performed well in 2012, we believe that there are all the reasons to support the current rally and increased activity in the market. We expect that market to continue to reflect the performance of the economy this year.

"As long as we have a robust economy and increased government spending on big projects the market momentum is likely to be maintained," Marhoon said.

The MSM30 has gained 6.81 per cent this year, compared to the mere 1.2 per cent rise in the entire 2012.

He added that the MSM had witnessed increased participation by foreign investors last year and this year it will be around 32 per cent of total market investments.

"The number of investors is also increasing, which is an indication that confidence is returning back to the Oman market. We are optimistic of more initial public offerings [IPOs] this year," Marhoon added.

Muscat Daily