Positive Q2 earnings results lift MSM

18/07/2016 06:12 AST

Taking cue from the positive momentum in the second quarter earnings, the Muscat Securities Market made gains on the first day of week’s trading on Sunday. The failed coup in Turkey did not have any impact on bourses across the region. In a trading dominated by stock specific activity, Omanis emerged as net sellers, GCC and Arab investors were net buyers. The benchmark MSM30 Index reached 5871.8 with rise of 11.84 points, The Sharia Index was down by .41 per cent. The market turnover reached RO 4.58 million. All the indices ended in optimistic territory.

While Al Jazeera steel was the most active with a gain of 9.01 per cent, Al Izz Bank was biggest loser with 3.39 per cent. According to analysts, the earning reports being reported by many companies are positive.

“The better than expected results, especially from the banking sector, have propelled the investor sentiments”, said Suresh Kumar, Research Head at Al Maha Financial Services. The positive earnings are expected to trigger activity on the local bourse, he added. According to Gulf Baader Capital Market estimates, the revenue of MSM30 Index companies is expected to be around RO 1.978 billion, an increase of 4.6 per cent, in the first half of 2016. Index earnings are seen at RO 357.136 million, an increase of 7.3 per cent year on year. Regional markets are also reportedly in an upbeat mood following positive earning reports. Equities in Saudi bourse climbed with Almarai rising 2.7 per cent. The Saudi index edged up 0.3 per cent.

Dubai edged up 0.3 per cent as builder Arabtec , the most heavily traded stock, jumped 4.0 per cent. Abu Dhabi added 0.1 per cent although Abu Dhabi Islamic Bank sank 3.5 per cent after it posted on Thursday a 1 per cent rise in second-quarter net profit but warned it was restricting the amount of new credit it provided because of an increase in defaults across its business lines.

Bahrain underperformed the region, dropping 0.7 per cent, while Qatari stock index down 0.4 per cent.

However, the liquidity and subdued market volume in the local bourse is still a concern. Although recent amendments to the capital market law allowing relaxation in secured financing or margin trading are expected to enhance liquidity and volumes on the local bourse, observers say that market is yet to react to it.

The new rules included expansion of the base of the companies licence to carry out margin financing activity to include the companies listed on both the regular and parallel markets not only the companies listed on the market index which are 30 companies.

Oman Daily Observer