Muscat Stock Exchange emerges as second best-performing market in GCC

Muscat: The Muscat Stock Exchange (MSX) 30 index was the second-best performing market in the GCC during February-2023 witnessing a monthly growth of 1.1 per cent to close the month at 4,753.28 points following consistent daily volatility since the start of the year, according to a new report.

“In terms of sector performance, all the three sector indices recorded monthly gains during February-2023,” the Kuwait-based Investment Strategy & Research firm Kamco Invest said in its 'GCC Markets Monthly Report February 2023'.

The Services Sector Index recorded the biggest monthly growth of 2 per cent during February-2023, closing the month at 1,714 points. The growth was primarily driven by the gain in shares of utility companies including Voltamp Energy which witnessed share price growth of 20 per cent during February-2023 and Phoenix Power which witnessed 5.6 per cent gains during the month, the report said.

The Financial Sector index followed witnessing a monthly rise of 1.8 per cent to close the month at 7,671.8 points while the Industrial Sector Index registered a monthly gain of 1.6 per cent during February-2023, the Kamco Invest report said.

In the primary market, the ongoing IPO of Abraj Energy Services is reportedly covered at the top of the offered range, according to Bloomberg. The IPO is floated by Oman’s QQ which is selling about 377 million shares at 242 baisas to 249 baisas per share in the offering.

Trading activity was mixed during February-2023 with monthly value traded recording a gain of 7.1 per cent to reach OMR42.50 million during February-2023 as compared to OMR39.70 million during January-2023. Comparatively, the total volume of shares traded in the exchange witnessed a decline of 34 per cent to 162.40 million during February-2023 as compared to 246.10 million in January-2023.

Omantel topped the monthly value traded chart for the month with trades at OMR10.20 million followed by Bank Muscat and Galfar Engineering & Contracting with total value traded at OMR9.60 million and OMR3.10 million, respectively. In terms of monthly volume traded, Bank Muscat topped with 33.80 million shares followed by Galfar Engineering & Contracting and Sohar Bank with volume at 16.10 million shares and 13.50 million shares, respectively.

In terms of company performance, shares of SMN Power Holding topped the gainers list with a share price gain of 27.8 per cent followed by Gulf Mushroom Products and Oman Education and Training Investment with 23.7 per cent and 20 per cent monthly share gains, respectively. Shares of SMN Power Holding gained after the company announced cash dividends of 15 baisas for FY-2022.
On the decliner's side, Sohar Power reported the biggest decline of 15 per cent followed by Al Batinah Power Company and Oman Qatar Insurance with declines of 13.5 per cent and 11.9 per cent, respectively.

In economic news, the Omani government recently launched the 'Invest in Oman' programme intended to attract foreign investment to the Sultanate. In context, Oman's total foreign investment reached over OMR25 billion in 2021 out of which 70.9 per cent was in the form of foreign direct investment (FDI) as compared to other foreign investments which accounted for 23.9 per cent. In comparison, the Sultanate’s total investments abroad reached OMR6.0 billion in FY-2021 up from OMR5.90 billion in FY-2020.

The UAE was the biggest destination for Oman’s foreign investments receiving OMR1.0 billion in Omani direct investments during FY-2021. Oman-UAE economic ties have been gathering momentum and recently the two GCC countries signed a $3 billion deal to construct the Emirates-Oman rail network which connects the two countries. The 303-kilometre rail network will be overseen by Oman and Etihad Rail in a joint venture between the companies.

GCC index slides
GCC equity markets reported weak trends during February-2023 to reach multi-month lows only to partially recover on the last trading day, the Kamco Invest report said.

The aggregate MSCI GCC index witnessed the biggest monthly decline in 5 months at 5.2 per cent to close the month at 666.75 points. The monthly decline pushed the year-to-date 2023 performance in the red with a decline of 3.7 per cent. The decline was mainly led by fears of the economic impact of multiple expected rate hikes in the US this year, especially after the release of recent economic data. Weaker crude oil prices also affected markets in the Gulf Cooperation Council (GCC). Brent crude futures dropped by 0.7 per cent during the month, the second consecutive month of decline this year, to close at $83.9 per barrel. In addition, weaker earnings for some GCC stocks announced recently also affected sentiments in the market, although the broader earnings growth for 2022 vs. 2021 remained healthy.

The performance of individual markets in the GCC remained mixed during the month. Dubai was the only prominent gainer with a monthly gain of 4.1 per cent. On the decliner’s side, Saudi Arabia topped with a steep monthly decline of 6.4 per cent during February-2023 followed by Qatar and Kuwait with declines of 3.3 per cent and 0.5 per cent, respectively. Dubai and Bahrain were the only markets in the GCC that continued to show gains for year-to-date 2023 at 3.0 per cent and 1.9 per cent, respectively, while Saudi Arabia and Abu Dhabi showed relatively higher declines of 3.6 per cent each by the end of February-2023.