18/02/2018 06:55 AST
Lesser dividend announcements and the acceleration of disclosures by companies in other financial markets regarding their full year results in addition to general cautious sentiment have resulted in moderate trades despite good-sized deals on selected shares. However, the general index ended the week up by 0.2 per cent at 5,016.62 supported by some banks and companies that proposed good dividends for 2017.
The Financial sub Index was the only gainer as it closed up by 0.2 per cent while both the Industrial and the Services indices closed down by 0.76 per cent and 0.27 per cent respectively. The MSM Shariah Index closed down by 0.14 per cent.
In the weekly technical analysis, as we mentioned last week closing the MSM index above 5,000 points will support the index to reach the level of 5,060 points. The MSM30 index still above the level of the MA10 which is a positive technical indicator. Presently the index is supported positively, and will support the index to reach the first resistance level at 5,030 points. The total proposed cash dividend for the year 2017 is RO 265.5 million, higher by 1.1 per cent YoY, in spite of a 3.3 per cent YoY decline in total earnings of the companies that have proposed dividends so far. The financial sector contributes 67 per cent to the total proposed amount, followed by services at 23 per cent and Industrial sector at 9 per cent.
The industrial sector’s cash payout tops with 98.1 per cent of earnings proposed to be paid out as cash, followed by the Services sector at 72.8 per cent and Financial sector at 44 per cent. The total market proposed cash payout stands at 51.3 per cent of total earnings of 2017 for the companies that have proposed cash. The dividend yield of the market stands at 3.4 per cent. Financial sector leads in dividend yield on proposed dividends at 4.6 per cent, followed by the Industrial Sector at 2.4 per cent and Services at 2.1 per cent. The total stock dividend proposed for 2017 on MSM stands at RO 66.95m, higher by 29 per cent YoY, primarily contributed by the Financial Sector companies, as many companies within this sector have to meet certain capital requirements. The total market payout on proposed cash as well as stock dividend is 64.1 per cent, as compared to 58.3 per cent in 2016.
In 2017, 24 new closed joint stock companies were established in Oman with an issued capital of RO 46.62 million, according to the Ministry of Commerce and Industry statistics. The total number of completely Omani registered closed joint-stock companies increased from 340 companies until the end of 2016 to 362 until the end of last year, which are divided between commercial, service and industrial activities. The number of companies subject to the law of foreign capital investment increased from 7,992 in 2016 to 8,811 until the end of 2017.
Majority of the GCC financial markets closed up led by Kuwait Stock Exchange which closed higher by 1.65 per cent on weekly basis while Abu Dhabi Securities Exchange was the only loser as it closed down by 0.48 per cent.
MSCI announced the changes to its indices on its quarterly review last week. As per the announcement, Orascom Construction will be cut from the Small Cap Index on low liquidity. In addition, the Saudi Investment Bank will also be cut from the MSCI Saudi Arabia Standard Provisional Index, most likely on same liquidity issue. In Egypt, El Sewedy Electric was cut from the MSCI EM Small Cap Index. Eastern Tobacco replaces EFG Hermes in the MSCI EM Standard Index.
Globally, oil prices which are already under pressure are expected to witness further burden as recently America announced that it will sell half of its emergency oil reserves to help pay its bills. US proposed selling 100 million barrels of oil from the Strategic Petroleum Reserve by 2027. Combined with other sales approved last year, that would mean the volume of oil in the reserve would fall by 45 per cent, to about 303 million barrels. The stockpile is kept inside a network of underground caverns and storage tanks along the US Gulf Coast and has a capacity of 700 million barrels, making it the world’s largest supply of emergency crude oil. Recently oil prices are trading close to $ 60/bbl, meaning sale of 100 million barrels would raise $6 billion. The last drawdown, a congressionally mandated sale in September 2017, fetched an average $47.45/bbl, while the one before that drew $53.88/bbl. According to the Energy Department, the reserve’s inventory cost an average $29.70/bbl.
Opec started the year on a strong note in continuation with its output cut (Opec-10) at a record high of 134 per cent in January 2018. The average crude oil price (Brent) stood at $61.4/bbl, during 4Q17 while the same YTD 2018 stands at $68.06/bbl.
Total Opec-14 crude oil production averaged 32.30 mb/d in January, a minor decrease of 8 tb/d over the previous month. While production mainly decreased in Venezuela and Angola, partially offset by Iraq, Saudi Arabia and Libya.
Oman Daily Observer
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