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Omani investors are eagerly waiting for Initial Public Offerings (IPOs) of four insurance companies, which are expected within the next three to four months.
According to sources, Oman and Qatar Insurance, Falcon Insurance, National Life Insurance and Al Ahlia Insurance Company are getting ready to come out with their IPOs in line with a Central Market Authority (CMA) regulation.
In fact, CMA has approved a request from insurance firms to offload a minimum of 25 per cent stake of promoters, instead of the normal 40 per cent disinvestment carried out in IPOs.
Most of the insurance companies have already appointed issue managers and the share offers will be floated one after the other.
Market sources said there is enough liquidity in the market and the investment funds are waiting for suitable investment avenues.
“Several investment funds have idle funds, which they want to deploy in initial public offerings,” said a market source, who did not want to be quoted. Also, there was not even a single share offer in the last one year or so.
The insurance company issues are expected to receive an overwhelming response due to attractive pricing. Insurance companies that are listed on the Muscat Securities Market have attractive valuations due to a slump in the market and the companies that is coming out with IPOs will have to take in to consideration their peer group companies.
Growth in premium
Oman’s insurance companies have posted a 1.9 per cent growth in gross direct premium income at OMR454.64 million in 2016, from OMR446.18 million in the previous year. The Life insurance portfolio posted a 213.3 per cent growth to OMR33.40 million in 2016, marking the highest rise among different insurance segments, CMA said in a recent report.
Although the Sultanate has 22 insurance companies (11 locally incorporated and 11 branch operations of foreign firms), only four companies—Dhofar Insurance, Oman United Insurance, Al Madina Takaful and Takaful Oman—are listed. Of these, Al Madina Takaful and Takaful Oman are Islamic insurance firms.
The new listings will mark a new chapter in the Omani insurance sector, as local companies will be able to withstand competition by strengthening their financial, technical and human resources. A higher capital base will make these institutions large enough to underwrite more risks and retain premiums within the country.
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