Muscat shares edge lower

27/11/2011 00:00 AST

THE MSM 30 index closed 1.68 per cent lower for the week ended November 24, 2011 at 5,429. All the sector indices ended lower led by a 2.59 per cent fall in the industrial sector. Market turnover during the week was 6.03 per cent lower than in the previous week at RO12.24 million.

Key factors that influenced market movement in the previous week include:

Global markets suffered a major setback after the US congressional super committee failed to reach an agreement on deficit reduction. This automatically triggers spending caps from January 2013 to bring down deficit by $1.2 trillion over the next ten years. However, none of the ratings agencies has lowered their US sovereign rating following this event.

The US dollar continued to appreciate against the euro and most emerging market currencies leading to downward pressure on commodities. Industrial commodity prices declined after China’s factory output shrunk the most in 32 months in October. Global steel production slowed to its lowest level over the past 10 months in October.

The IMF has launched a six-month liquidity line to relatively solid economies that may be at risk from the eurozone debt crisis.

Foreign institutional investors (FIIs) outflows from Asian emerging markets such as India remain high leading to a major sell-off in their equities.

Foreign selling pressure continues to drag stocks lower in the MSM. Foreigners were net sellers in the previous week by nearly 11 per cent while Omanis were net buyers by 10.6 per cent.

Oman Budget 2012 forecasts a seven per cent real gross domestic product (GDP) growth rate in 2012 with state revenue expected to increase 20.5 per cent to RO8.8 billion, while total public expenditure will increase 8.7 per cent to RO10 billion. Oil revenues for the 2012 budget are calculated at $75 per barrel.

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Times of Oman