Omani stocks see risks with oil volatility in sight

Muscat: The Omani stock market recorded limited price movements during a shorter trading week, stabilising to a certain extent after the constant losses of this month, according to an industry expert.

“However, the market could be exposed to additional declines during the coming trading sessions if sentiment remains pessimistic and traders maintain their cautious stance,” said Ahmed Negm Head of Market Research MENA at XS.com. “While the main index recorded a slight rebound compared to its lowest point last week, it failed to build a clear reversal from the current downward trend,” he added.

While the market’s global performance was limited, its sectors witnessed mixed results. The services and financial sectors climbed, reversing part of the decline they recorded during the week before. The industrial sector however fell, extending losses from previous weeks. The services sector was a clear leader, recording a 2 percent increase, but continued its seesawing performance over the weeks. This week saw a return to declining trading volumes.

Among individual stocks, the Oman Arab Bank (OAB) stock recorded a significant increase of more than 7 percent in the week, recovering its losses from the previous week. Among banks, it was followed by Bank Nizwa which increased by 2 percent during the week and dominated more than half of the trading volumes on the Omani stock market with Bank Muscat and Sohar International Bank.

Market Sentiment could see an improvement over the coming month as traders’ attention could remain direct toward OQ’s initial public offering (IPO), said Ahmed Negm. The company has seen its listing operation attract strong interest from investors, resulting in its oversubscription. “The stock’s trading debut later in October could help lift trading volumes and boost the market to a certain extent. The IPO could play a role in improving the performance of the stock market, which remained without a clear direction this year,” he further added.

Attention could also remain on oil markets which have been seeing significant volatility this week, with the Omani crude reaching a peak price of $96 before retreating. “Crude prices could however continue to extend gains over the medium term and could push Omani stocks and help the stock market to stabilise and recover,” said Ahmed Negm.