Friday 17 / May / 2024
Muscat: The Omani stock market recorded a slightly positive week but remained within a horizontal trading range since the beginning of July, according to an industry expert.
“In this regard, it contrasted with some other markets in the region and other major global markets which have been declining lately,” Hani Abuagla Senior Market Analyst at XTB, said.
“Although the main Omani index was able to record some increases, it could not return near its latest peaks which could fuel some pressures if traders move to secure their gains in particular as global uncertainties remain,” he further added.
Last week, the main index of the MSX resumed its rise, up 28 points and closed at 4,785 points. The financial sector index rose 27 points and the Sharia index recorded a slight increase, while the industrial sector index declined 110 points.
The market was mostly supported by the positive performance of the financial sector which recorded particularly strong gains from Ominvest, Oman United Insurance, National Bank of Oman, and Sohar International Bank, Hani Abuagla said. Ominvest released second-quarter earnings which were higher than in the same period of last year although lower than in the previous quarter.
Overall, increasing trading volumes compared to the previous week have also helped the market’s rebound.
“Sentiment could become more positive and trading volumes could increase if expectations over global conditions improve and uncertainty around monetary policy recedes and the volatility in energy markets diminishes,” Hani Abuagla added.
In this regard, oil prices remain in a tumultuous period and have been declining during the week after a multi-month strong performance that hit this year’s peak, he said. Oil markets have been rattled by the concerns around demand levels in China in particular where the economic recovery continued to be weaker than expected.
“However, the production cuts established by Saudi Arabia could continue to support the market and create opportunities for Omani oil exports,” Hani Abuagla further added.
However, China’s economic performance could remain the centre of attention for global traders as well as investors in the Omani stock market due to its potential impact on the local economy. Besides the slowing activity in the Chinese manufacturing sector, some concerns emerged again from the banking and real estate sectors which investors could monitor for potential contagion risks. The country could also see some risks regarding its credit rating.
In parallel, investors have monitored the release of the Federal Reserve’s minutes as well as some data on the US job market this week, Hani Abuagla said. Both have supported the possibility of maintaining a strict monetary policy if not increasing rates again. “While the end of the interest rate hike cycle could be near, concerns about another increase could fuel some uncertainty among investors in global stock markets and could contribute to the volatility in Omani stocks as well,” he added.
Next week, traders could monitor US data and interventions from the Federal Reserve’s governors which could culminate during the Jackson Hole Symposium during the second half of the week. The event could impact the expectations of investors which could be more cautious ahead.
