29/03/2015 07:40 AST
In line with its peers across the Gulf Arab countries, the Muscat Securities Market plunged as uncertainty in the region caused investors to keep off the market. The benchmark MSM30 Index closed the week on a weak note to close at 6112.91 points, down by 2.58 per cent. The MSM Sharia Index closed at 971.76 points, down by 2.62 per cent. The market capitalisation at the end of trading on Thursday stood at RO 6.589 billion. The slide came as a result of a massive sell-off following Saudi Arabia launched airstrikes on Yemen.
A total number of 1,483 trades were executed during the day’s trading session generating turnover of RO 6.75 million with more than 26.07 million shares changing hands.
Of the 44 traded securities, 1 advanced, 29 declined and 14 remained unchanged. At the session close, Omani investors were net buyers to an extent of RO 1.939 million while foreign and GCC investors emerged as net sellers to an extent of RO 1.635 million and RO 207,000 respectively. Almost all blue-chip stocks, including Bank Muscat, Ooredoo, Oman Telecommunications Company, National Bank of Oman, ONIC Holding, Renaissance Services and Oman Cement, lost ground on panic selling. Al Anwar Holding was the most active in terms of volume as well as turnover. Oman Orix Leasing was the day’s top loser and was, down by 9.86 per cent.
Bank Muscat lost 3.03 per cent to close at 512 baisas, while Ooredoo and Oman Cement plunged by 7.78 per cent and 7.03 per cent to close at 664 baisas and 476 baisas, respectively.
Analysts say investors are watching to see whether the air campaign will escalate. In case it happens, it would likely result in major sell-offs, they say.
Adding fuel to the impact of the war fears are the falling oil prices and dividend adjustments affecting the investor sentiment. “The air strikes in Yemen have really created a risk-off mood,” said an analyst at a leading brokerage firm.
Saudi Arabia’s stock market had lost 5 per cent on Wednesday, but gained nearly a half per cent by closing on Thursday, alongside the bump in higher oil prices.
The UAE’s second bourse in Abu Dhabi also dropped around 2.0 per cent at the opening but finished on Thursday, marginally up 0.03 per cent at 4,373.13 points.
The Qatar Exchange, the second largest in the Gulf, dived 3.5 per cent at the opening but rebounded strongly to close down 0.8 per cent on 11,410.76 points. The Kuwait Stock Exchange improved slightly from the 2.6 per cent loss in the morning to close 2.4 per cent lower on 6,222.46 points.
Jamal al Loungani, senior manager at Kuwait Petroleum Corporation, told the Kuwait News Agency on Thursday that oil prices are expected to increase, but that it depends on the military operation and the security of the Bab Al-Mandeb Strait between Yemen and Djibouti, which serves as a gateway for oil tankers headed to Europe.
Capital Economics said in an analysis that while there are concerns over the impact of the crisis on the oil market and threats of disruption through the Bab Al-Mandeb, the economic impact “should be limited,” in part because Gulf countries “are insulated, thanks to their substantial foreign exchange reserves.”
It also pointed out that Saudi oil facilities in the kingdom’s east and Oman’s oil fields “are a comfortable distance away” from the Yemeni border.
Oman Daily Observer
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