Oman bourse is GCC's third best performer

05/01/2011 00:00 AST

The Muscat Securities Market (MSM) became the third best performing bourse in the Gulf region with its 6.1 per cent gain in general index in 2010, after Qatar and Saudi, according to a detailed research report released by United Securities yesterday.

Qatar and Saudi bourses have achieved robust gains of 25 per cent and 8 per cent, respectively.

The United Securities report, which was jointly prepared by research analysts Joice Mathew, Santhosh Balakrishnan and Tariq Mustafa Salman, said that A’Saffa Foods and Dhofar Poultry were the outperformers on the MSM with over 300 per cent returns last year, while National Mineral Water and Al Shurooq Investment Services have been the two leading laggards, declining by 64 per cent and 52 per cent, respectively.

The market was in favour of declining shares with 68 stocks witnessed a fall, 42 advanced and 18 remained unchanged.

Turnover slips

BankMuscat stock remained the best performing stock among the MSM 30 index stocks, followed by Renaissance Services.

The United Securities report also noted that the trading volume dipped by 47 per cent to 2.99 billion shares in 2010 from 5.68 billion shares in 2009.

“The average trading volume declined to 12.2 million shares in 2010 from 23.3 million in 2009.”

Likewise, the total turnover of the bourse slipped by 42 per cent to RO1.32 billion last year, from RO2.28 billion in 2009. “It recorded the second lowest turnover during 2005-2010 period.” The average daily turnover on MSM plunged by 38 per cent to RO5.2 million in 2010 from RO8.5 million in 2009.

Lack of retail participation and liquidity are believed to be the key reasons for the significant decline in turnover.

The report also said that Omani and foreign investors were net buyers of RO19.7 million and RO1.7 million worth shares, respectively, while Gulf Cooperation Council and Arab investors were net sellers for RO21.4 million.

“BankMuscat remained the most active stock with a turnover of RO182 million and 207 million shares of trading volume. Galfar has the second highest turnover with RO73 million and Global Financial Investment is the second largest in trading volume with 203 million shares,” the report added.

United Securities added that MSM witnessed continued volatility in the second quarter of 2010 due to European Union crisis, which resulted in wiping out lucrative gains achieved in the first quarter. “However, the fourth quarter provided relief to the market.”

Among the sub-sectors, banking and investment index witnessed significant decline in the second quarter, which was led by investment holding companies.

Industry index also witnessed a similar trend in volatility and underperformed by 2 per cent, led by Raysut Cement and Oman Cement.

Services sector generated return of 0.1 per cent on strong support from Renaissance Services, despite downside effect from Al Jazeera Services and Oman Fisheries.

Times of Oman