Oman's stock market cuts losses as oil prices rebound

07/02/2016 08:33 AST

Muscat Securities Market (MSM 30) index reduced the losses it had incurred in the first three weeks of the year, to close above 5,000 points, at the end of January 2016, despite the fact that it closed at 4,867 points on January 21, a record-low since April 2009.

The index had slumped by 4.2 per cent in January to close at 5179 points; reflecting a decline by 226 points in a slump wave that affected all world and Gulf Cooperation Council (GCC) stock markets. While improvement in oil prices in the last week of January helped stock markets' indices climb again, it was still not enough to make up for the previous losses.

Oil prices slumped sharply last January to touch $22 per barrel. The expectations about the lack of oil supplies augmented prices to about $30 per barrel by the end of the month.

The sector indices fell by varying degrees, with the biggest decline being seen in the service sector, which slumped by 5 per cent. The Sharia market index decline 4.5 per cent, compared to 3.5 per cent for the industry index and 2.1 per cent for the financial sector index.

Many stocks reached their record lows during the year and were even close to their nominal value. The situation made the price attractive for investment companies and funds, which regarded this as a good way to augment their portfolios after the losses they had incurred over the past.

The purchases of local establishments vis-a-vis total trading were more than 60.3 per cent, compared to 49.1 per cent for the sales. GCC institutions purchases’ ratio to the total purchases was 10 per cent, compared to more than 28 per cent of the sales transactions.

In January 2016, the price of 40 stocks slipped, 13 companies went up and 23 companies remained unchanged. The biggest gainers on the MSM were Al Jazeera Steel, which closed at 157 baisas, showing a 15.4 per cent increase. This was followed by Bank Dhofar shares, which increased by 11.6 per cent to close at 239 baisas. Takaful Oman Insurance shares came third on the top gainers list and increased by 11 per cent to close at 111 baisas.

Renaissance Services shares topped the losers' list by dropping 22 per cent to close at 127 baisas, very close to its nominal value, which is 100 baisas. Galfar Engineering shares declined by 20 per cent to close at 56 baisas; below its nominal value. Al Jazeera Services shares slumped by 19.8 per cent to close at 250 baisas.

Times of Oman