Long-term value seen for MSM equities

06/02/2012 16:36 AST

The average daily turnover of the Muscat Securities Market for the period from 2005 to 2011 doubled compared to that of 2004, while the number of regular market securities traded during the period grew by more than a third of those traded in the same year.

The local bourse also witnessed more and more companies being listed, including some of the present blue chips after 2004 which provide a better representation of the market. During the period, the industry sector has been the best performer giving an impressive return of 115.2 per cent; followed by the service sector returning 69.2 per cent.

Oil and gas sector has been the major contributor to value creation. This is evident from the superior positive returns provided by all the listed companies in this sector.

Four of the five oil and gas companies also make it to the value creators list, re-emphasising the importance and performance of this sector.

These companies have strong and stable core business models with healthy cash reserves and zero or low debt with healthy cash flows and low debt.

“Over the years MSM gave superior returns compared to major regional markets. There have been hidden gems that have significantly outperformed the Index as well as investments in other assets”, according to a research report by Al Maha Fincancial Services.

During the last seven-year period, the emerging markets have significantly outperformed the developed markets and the world indices backed by their robust economic growth and fundamental strength.

The Europe, Middle East and Africa Region (EMEA Region) too has been noticeably outperforming the World Index during this period. The MSCI Emerging Markets Index returned 68.99 per cent for the period, while the EMEA Index returned a 26.78 per cent.

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Oman Daily Observer