MSM listed companies to pay OMR338m dividend for 2013

02/03/2014 08:49 AST

A whopping dividend payout of around OMR338 million by listed companies on the Muscat Securities Market (MSM) in March is expected to prop up the trading activity as almost half of the money is expected to come back to the local bourse as reinvestment.

"The overall estimated dividend payout of Omani companies for 2013 is to the tune of OMR338 million, which indicates a 10 per cent growth over OMR290 million paid by the companies in 2012.

The divided payout in 2013 excludes interim dividend paid by some companies before the year-end," Kanaga Sundar, Head of Research at Gulf Baader Capital Markets told Times of Oman.

The dividend payout ratio on the MSM is around 50 per cent as the listed companies must have posted a combined net profit of around OMR700 million.

Around 125 to 130 companies are listed on the MSM and barring few holding companies like Galfar Engineering & Contracting and Oman National Investment Corporation (ONIC) Holding, all listed companies have announced their dividend, which will be paid sometime in March, after the shareholders approve it.

Sundar further said that the dividend payment of the banks is lower than market expectation, mainly due to the fact that these financial institutions have to retain their earnings to cater to the regulatory requirement to comply with Basel III, which is effective from this year. Of the total dividend money, around 50 per cent will be reinvested in the market, either in primary issues or in the secondary market.

"We can expect almost 50 per cent of dividend money coming back to the bourse, mainly due to the market dynamics and better profitability of the corporate sector," added Suresh Kumar, Head of Research at Al Maha Financial Services.

Market outlook positive
Echoing a similar view, Anil Kumar, Head of Asset Management of the Financial Corporation (Fincorp), said that the market outlook is very positive this year.

Trading on the Muscat bourse was confined to a limited range between 2009 and 2013 and recently, this range was broken with the MSM 30 Index crossing the five year high to touch 7,113 points, added Anil Kumar.

The investor community will opt for deploying their dividend money in the market rather than depositing in banks due to better market outlook and low interest regime.

Three initial public offerings (IPOs) – Oman Telecommunications Company (Omantel), Al Suwaidi Power Co and Al Batinah Power Co - are in the process of raising OMR250-260 million within three months.

The market has ample liquidity and therefore, the issuers will not face any problem as far as subscription is concerned.

Times of Oman