Oil price to determine stock market trend: Swiss banker

12/10/2016 08:21 AST

Two major factors – trend in crude oil prices and the government’s ability to control deficit – will determine the recovery of Gulf bourses, including Oman, said a told level official of a leading private bank, who was on a short visit to Muscat.

“There are two fundamental factors, which will continue to influence local market. Crude oil price is a key element influencing balance of payments and government spending,” said Frederic Rochat, managing partner of Lombard Odier, a Switzerland-based private bank. “This has an impact on the local economy and market.”

Rochat also noted that the government’s decision to keep budget deficit under control, reduce state expenditure and economic diversification will also determine the future trend of the stock market.

He said that the slump in oil prices in recent years put a lot of pressure on the balance of payment of emerging economies. “Many analysts predict that there could be some improvement from the present price. For us, it is a signal that many investment opportunities could emerge from the emerging economies.”

Rochat noted that the valuation levels of equities (in emerging markets) are at depressed levels. Oman is an important market for Lombard Odier, he said, adding that the second and third generation entrepreneurs from the country are their clients. “Many of these entrepreneurs are looking for diversification (of portfolio investment) across equity, bonds and multiple regions.”

Lombard Odier, which was established 220 years ago as a family business, has a wide range of portfolio managers/investment specialists to help their clients in emerging and developed markets. Lombard Odier offers financial planning, succession planning, pension planning, philanthropy, family governance and tax-efficient portfolio management to their clients.

Times of Oman