Major firms in Oman post robust profit growth in first half

27/07/2016 07:54 AST

Major companies in Oman, which constitute the MSM 30 Index, have posted a robust growth in net earnings and revenues for the first half of the year, over the same period of last year.

The overall net profit of MSM 30 companies grew by 8 per cent to roughly around OMR361 million in the first half of 2016, said S. Suresh Kumar, head of research at Al Maha Financial Services.

He said the main reason for the better performance of the corporate sector was a robust growth in net earnings of banks. The net profit of conventional banks rose by 6 per cent on a quarter-on-quarter basis, while it was 1.6 per cent in the first half over the same period of last year.

All conventional banks in Oman put together made a profit of OMR91.08 million in the second quarter, against OMR89.24 million for the same period of last year. The locally incorporated conventional banks - Bank Muscat, National Bank of Oman, Bank Dhofar, HSBC Bank Oman, Bank Sohar, Oman Arab Bank and ahlibank – have a major chunk of market share in Oman.

Oman’s conventional banks have posted a 1.9 per cent growth in net (incremental) credit in the second quarter, over the previous quarter. In fact, the growth in credit slowed down in the first half, compared to the previous years. The growth is due to spill over from the previous quarter. Omani banks are likely to face challenges due to an increase in cost of funds and pressure on lending rates due to stiff competition.

Kannan Rajagopal, general manager of the Global Oman Investment Company, said that the performance of industrial sector was better than earlier expectations. “I hope the industrial sector will do better in the coming months of the year,” added Rajagopal. The performance of services sector was also good.

Suresh Kumar noted that the better than expected performance of the corporate sector is not getting reflected on the market trend due to lack of liquidity. “Trading volumes are not picking up.” The daily market turnover is just OMR2-3 million in recent weeks.

Times of Oman