Muscat: An Omani closed joint stock company has been established under the name of Muscat Stock Exchange (MSX), from Saturday (April 10, 2021) to takeover and undertake all activities and functions of the Muscat Securities Market (MSM).
This was in accordance with the Royal Decree No. 5/2021 issued by His Majesty Sultan Haitham bin Tarik, dated January 5, 2021 (Royal Decree). In accordance with the Royal Decree, all assets, liabilities, activities, rights and functions of MSM stand transferred and assigned to MSX.
The Muscat Stock Exchange will operate under the umbrella of Oman Investment Authority (OIA), which has been established to provide financial solutions to the Sultanate's diverse and growing economic demands.
The MSX with the support of OIA will work to increase Oman’s Foreign Direct Investments (FDIs) as well as help support MSX members to participate in the continued march of Renaissance to find new avenues and instruments for the growth of the Sultanate's national economy.
The transformation of the market to a closed Omani joint stock company will enhance the investment development process, both by providing an effective platform full of opportunities for listing and trading securities, as well as supporting diversity in economic development plans and ensuring the sustainability of financial instruments.
With this transformation, MSX aspires to take a leading role in the regional as well international securities arena through various innovative initiatives aimed at developing the stock exchange with transparency, governance, improved companies performance, increased operational effectiveness and the issuance of new investment opportunities and instruments, for the benefit of both local and international investors.
On this occasion, Sheikh Abdullah bin Salem Al Salmi, Executive President of the Capital Market Authority (CMA), expressed that the decision has been a momentous declaration and a monumental step in the development of the Omani capital market.
He also expressed that today’s date will be recorded in history as an important milestone in Oman’s capital market journey.
“Creating of MSX as an independent institution owned by the OIA, is a step that represents a qualitative leap that shall bring upon us a new era of development followed by the developments in the entire economic framework of the Sultanate,” he said.
This step is also in line with the global best practices of governance, which include providing exchanges with independent legislative structure in order for them to perform better and in a more professional and transparent manner.
Al Salmi expressed that the transformation of the Exchange into an independent company, comes at an important stage that the Sultanate is going through in light of the Renewed Renaissance led by His Majesty Sultan Haitham bin Tarik, and the renewed vision of Oman 2040.
“We are certain that this step will help improve the market further and provide a platform for market forces to flourish in order to derive desired results necessary for the development of our investment climate and provide us with a more diversified market,” he added.
Al Salmi said that this is the first step towards the transition of MSX into becoming a public listed company on our securities platform, in future, keeping in line with the global best practices.
“We are optimistic that this step will achieve the goals set for it, and allow the exchange sufficient freedom, necessary to manage its affairs with improved and faster decision-making powers. In addition to being able to adapt innovative marketing practices for the promotion of its products and services,” he further added.
The performance of the stock exchange will be subject to the standards of good governance, regulations and legislation that ensure its good performance and enhance its ability in the face of regional and global competitiveness, Al Salmi said.
This independence also enhances the role of CMA as a regulator and as a supervisory body in a way that leads to protecting investors by raising the efficiency of the stock exchange and trading operations, while achieving more transparency, making the market more efficient and more accountable which will in turn lead to enhancing investor confidence in the market. This will create a cycle of trust and attractiveness in the global investment arena for the local capital market, he said.
Al Salmi affirmed that the stock market plays a vital role in contemporary economies, as it is the benchmark of the country's financial and economic systems, and an effective engine for economic growth through its ability to employ domestic savings and other financial surpluses to finance projects and investment initiatives offered by the private sector or cover the government's financing needs to implement comprehensive development projects and programmes.
“Ideally, it’s the country’s exchange that leads the economic activity by providing liquidity, capital allocation and enhancement of future economic growth prospects,” he added.
Mohammed bin Mahfood Al Ardhi, Chairman of the Board of Directors of the MSX, stated that this day is a historic milestone in the march of the securities sector in the Sultanate of Oman, a new start for its financial market and a next stage of growth and development.
To reach a solid and sober ground that enables this renewable institution to move forward towards prosperity, providing its services efficiently and following the best practices and international standards, he said.
The chairman of the Board of Directors affirmed that the MSX has sufficient resources that it will work on to develop the stock market sector by offering and presenting new investment products and services that meet the aspirations of investors, and working with all relevant parties to overcome obstacles and turn challenges into opportunities that enhance the stock’s position on the investment map.
Al Ardhi said, “The stock exchanges are one of the basic infrastructure institutions for economies and their presence as companies gives them the independence and flexibility they need to organise their business and follow the profit-based commercial approach without prejudice to the main principles and the provision of all services with high efficiency and effectiveness.”
He also added that in the light of the changes taking place in the Oman economy and the direction of the government of His Majesty Sultan Haitham bin Tarik, through Oman 2040 Vision, to further empower the private sector to take its real role in leading the national economy, and the existence of a fully-fledged stock exchange will contribute in one way or another to Enhancing the hoped-for role of the private sector.