Capital Market Authority cancels three brokerage licences in Oman

Muscat: Oman’s stock market regulator Capital Market Authority on Sunday cancelled licences of three brokerage firms – Al Shurooq Securities, Tawasul Financial and Investment Services and Rasmala Investment Company.
These licences were cancelled after the respective brokerage firms requested for the same, according to sources at CMA.
Rasmala was taken over by the Financial Corporation, while the other two brokerage houses have decided to discontinue operations.
In fact, a fall in traded volumes on the Muscat bourse and other GCC markets (after a severe drop in oil prices) has affected both revenue and net earnings of brokerage firms. “This was in line with the trend in GCC countries,” said a CMA source.
Last year, the market turnover and volume dropped as investor participation and trading activity witnessed significant fall. The total turnover dipped by 31 per cent to OMR959 million in 2016 from OMR1,390 million for the previous year. The average daily turnover for last year was OMR3.96 million, down by 29.3 per cent from OMR5.6 million in the previous year.
The Muscat Securities Market’s average turnover last year was the lowest in the last eight years. Omani investors were net buyers during the year by 9.01 per cent in terms of value of traded securities.
With a sharp fall in traded volumes, some of the brokerage firms were finding it difficult to comply with the capital requirements of the market regulator.
The Omani bourse was the second best performing stock market in the Gulf region, after Dubai, which soared by 12.06 per cent. Also, the market capitalisation of the Muscat bourse rose by 9.56 per cent to OMR17.29 billion by end-December 2016, against OMR15.78 billion for the same period of 2015.
The traded volumes on the market started improving after oil prices started its recovery early this year. However, it is still below 2014 levels.
As many as 17 companies are engaged in brokerage business on the Muscat Securities Market, while the total number of companies that hold CMA licence for various activities, including fund management and portfolio management, stands at 34.