Dividend announcements drive Muscat bourse

Muscat: Recovery on the Muscat Securities Market (MSM) is expected to gather momentum, thanks to better dividend announcements of the corporate sector and a firm trend in crude oil prices.
Dividend announcements so far were in line with the market expectations.
“The broad market outlook is positive, although a rally was not seen in the market,” said Suresh Kumar, head of research at Al Maha Financial Services.
He said the market had remained flat in the last couple of months, after a rally amidst Opec’s decision to cut oil production. “Dividend announcements are in line with the market expectations, which are based on historic payouts. This is partially driving the market,” added Suresh Kumar. Besides, the macro-economic factors are also favourable.
The MSM general index rose 17.32 points to close at 5,869.43, with 20.42 million shares changing hands on Wednesday. The major gainers include Oman Textiles, Oman Fisheries, Oman and Emirates Investment Holding, Galfar Engineering and Contracting, Renaissance Services and HSBC Bank Oman.
Better demand was seen in the case of stocks that lost value in the last month or so.
Suresh Kumar said the dividend money of investors will come back to the market as reinvestment, either by way of new initial public offering subscriptions or in the secondary market. Seven national insurance firms are expected to come out with initial public offerings within five months, while plans are afoot to offer shares of Mining Development Oman to the investing public.
Dividends
Listed companies on the Muscat Securities Market are expected to maintain total dividends for 2016 at the previous year’s level of OMR350 million.
According to market sources, MSM 30 companies alone have achieved a 16 per cent growth in net earnings at OMR630 million in 2016 and the payout of these major companies is seen at 50 per cent.
Scores of listed companies, including banks, leasing and hire purchase firms, oil marketing firms and utility companies, have already announced their dividends for 2016. As many as 130 companies are listed on the Muscat Securities Market, but a section of listed firms will not offer any dividend due to losses. Traditionally, telecommunication, oil marketing firms and utilities are the dividend pay masters in Oman.
Traded volumes on the Muscat bourse were moderate since the beginning of this year.