Muscat shares edge lower

THE MSM 30 index closed 0.73 per cent lower in the week ended January 12, 2012 at 5,691. All the sector indices ended lower led by a 1.66 per cent fall in the industrial sector. Market turnover during the week was 28.9 per cent higher than in the previous week at RO20.33 million which includes a block deal in Bank Sohar.

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

The local market underwent a correction with a breadth of 31 declining stocks to 17 advancing stocks while 17 stocks ended flat. Foreigners were net sellers by 9.3 per cent while the other categories of investors were net buyers

Among banks, OIB and NBO are the top gainers for the year-to-date. While OIB is moving higher based on merger news with HSBC Oman, NBO is the cheapest banking stock in terms of P/BV at 1.24 times besides a dividend yield of around five per cent.

Al Anwar Ceramic Tiles reported a net profit of RO5.7 million for the year ended 2011, which is 8.0 per cent higher year-on-year.

Total revenue for the period was RO19.2 million, 10 per cent higher year-on-year. Earnings per share for the year was approximately 29 baizas and the stock currently trades at a P/E multiple of 11.4 times.

Bank Sohar reported a net profit of RO14.5 million for the year ended 2011, which is 42 per cent higher year-on-year.

Total operating income during the year rose 23 per cent year-on-year to RO43.2 million. Net loans and advances rose 13 per cent year-on-year to RO1.0 billion, while customer deposits rose 17 per cent year-on-year to RO1.2 billion.

Provisions increased in fourth quarter of 2011 above our estimates while the bank did well in terms of operating profit in fourth quarter of 2011. OIFC has acquired a 9.9 per cent stake in this bank.

GCC market outlook

GCC markets ended the week on a mixed note with Saudi and Kuwait benchmark indices gaining 1.23 per cent and 0.35 per cent while the other markets declined led by Qatar, which fell 2.1 per cent. Volume traded was the highest in Saudi, Kuwait and Muscat markets over the past 52 weeks though some of that volume was in the form of block deals. The Qatar market’s drop was due to a 5.4 per cent drop in Qatar National Bank (QNB), which has a weight of 22 per cent in the index. QNB reported a net profit of QR7.5 billion for the year ended 2011, which is 32 per cent higher year-on-year. Total operating income for the period rose to QR10.2 billion, 34 per cent higher year-on-year. Loans and advances at the end of the year were 47 per cent higher year-on-year at QR194 billion.

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