Insurance, leasing sectors post substantial growth

08/10/2012 14:56 AST

Rising liquidity in the economy, easy access to funds and focused approach of the managements have helped the Omani corporate sector to achieve across the border growth. While the banking sector continues to be a major trend setter for growth, other sectors like leasing and insurance too have made substantial gains.

The Sultanate’s State General Budget for 2012 projected a record high public expenditure of RO 10 billion and total revenue of RO 8.8 billion, estimating a deficit of RO 1.2 billion.

However, during the first seven months of the year itself, the Sultanate recorded total revenue of RO 8.75 billion against an expenditure of RO 6.71 billion and a surplus of RO 2.04 billion as at the end of July 2012 compared to a surplus of RO 0.44 billion for the same period last year, according to latest data available Statistics Department of Ministry of Finance.

The government sees an impressive growth this year with the budget surplus expected to reach RO2.5 billion in 2012, according to a government economic planning official. The Omani corporate sector has capitalised well on this growth.

“The government spending on infrastructure and oil and gas projects, along with rising disposable income of the people have led to a healthy demand for products and services”, says Suresh Kumar Head of Research at Al Maha Financial Services.

The combined profits of MSM-30 companies registered a growth of 19.8 per cent year on year to reach RO 300.8 million during the first six months of 2012 as compared to RO 251.05 million during the same period last year.

The financial sector of the MSM-30 recorded a total profit of RO 151.46 million for the six months ended June 2012, registering a healthy growth of 22 per cent year on year compared to a total net profit of RO 124.17 million1 for the corresponding period last year.

According to a research report of Al Maha Financial Services, the leasing sector of Oman demonstrated an impressive performance during the first half of the current year, backed by healthy credit disbursements.

The six leasing companies together have recorded net profit of RO 11.06 million during the first six months of 2012 compared to RO 9.19 million reported in the first half of 2011. Gross investment in financial leases of the sector stood at RO 764.26 million as on June 30, 2012, registering an impressive growth of 20 per cent from RO 636.78 million reported a year ago. Job creation initiatives by the government and hike in wages have supported the credit demand in the consumer segment.

Al Omaniya Financial Services remained as market leader, capturing around 27.7 per cent of the total investment in financial leases as at the end of June 2012. Oman Orix Leasing and United Finance showed a marginal improvement in its market share compared to June 2011.

For more on this Click Here

Oman Daily Observer