MSM logs 11.7% weekly fall over oil price slide

14/12/2014 07:25 AST

Oil price decline saw the Muscat Securities Market (MSM) index nosedive by 11.7 per cent during the week ended Thursday.

The MSM30 index closed at 5,807.55 points, or 769.44 points, down from its closure of 6,576.99 during the week ended December 4.

According to market analysts, the oil price fall, coupled with government efforts to shore up revenue through doubling of price of gas supplied to several companies left bearish sentiments prevail.

The market capitalisation during the week was down 5.84 per cent to 13.74 billion rials.

The financial index was down 10.86 per cent at 7,038.20 points, industrial 12.51 per cent at 8,070.39, services 5.2 per cent at 3,377.25 and Sharia 0.32 per cent at 919.39.

The two major cement companies – Raysut and Oman Cement – saw their share prices dropping substantially since they had disclosed to the bourse that their bottom line would be hit owing to the gas price increase.

Among the top losers were Gulf Investment Services whose price fell 25.14 per cent to close at 137 baisas, Al Sharqia Investment Holding 24.85 per cent at 124 baisas, Raysut Cement 24.28 per cent at 1.450 rials, Al Anwar Holding 24 per cent at 190 baisas and Oman Cement 22.47 per cent at 490 baisas.

According to analysts, cement companies were facing a tough situation with the flow of cheap cement from neighbouring countries which would not allow it to pass on a part of the higher gas cost to consumers.

This would mean that their bottom lines would take the hit.

This resulted in dampened sentiments and share prices of the two tumbling.

Others to bear the brunt of the bearish sentiments were investment holding, broking and insurance companies.

These were companies that have very high market exposure and are so sensitive to any minor change in the market.

As a result, some of these firms joined the big league of losers..

Oman Tribune