Omani bourse less affected by global market crash
February 6, 2018 | 5:30 PM
by A E JAMES/[email protected]
- Times file picture

Muscat: The global market crash didn’t have a major adverse effect on the Muscat bourse on Tuesday, mainly due to the fact that Oman market was not buoyant last year like its counterparts across the world.

The MSM 30 Index, the barometer of market sentiment, fell only by 0.77 per cent or 39.06 points to close at 5,012.30 points, compared to a 3 per cent slump in emerging market index.

“As far as Oman market is concerned, the bourse did not participate in the 2017 bull-run, which was witnessed across the world,” Kannan Rajagopal, general manager of the Global Omani Investment Company, told Times of Oman. “In fact, there was a fall in share prices on the Muscat bourse in 2017,” he added.

Sentiment-driven fall

Echoing a similar view, Loai Bataineh, chief executive officer of Ubhar Capital (U Capital), said that the impact in Oman is more of sentiment-driven, rather than driven by market fundamentals.

“If the market is influenced by fundamental factors, it should go up due to three positive factors. Crude oil prices are still firm, government is in a comfortable position in managing fiscal deficit and the postponement of implementation of value added tax,” explained Bataineh.

Rajagopal also said that Omani stock valuations are attractive now, after the market declined in recent months.

“Barring a systemic risk, the Omani bourse is expected to perform well in 2018,” added Rajagopal. Investors across the world have scrambled for the exit in the wake of Friday’s data showing the largest US wage growth since 2009. This has fuelled expectations of faster rate hikes, driving 10-year US Treasury yields to four-year highs.

The major losers on the Muscat bourse on Tuesday included Al Batinah Power, Alizz Islamic Bank, Galfar Engineering and Contracting, Gulf Investment Services, Oman Fisheries and Ahlibank.

Like the Omani bourse, other Gulf markets marginally declined on Tuesday because of the global downturn in equities, but the region outperformed emerging markets in Asia, where MSCI’s broadest index of Asia-Pacific shares ex-Japan was down by 3.7 per cent.

Gulf markets

As has been the case in past global downturns, the Gulf markets which are part of emerging market indexes — Dubai, Abu Dhabi and Qatar — may be most vulnerable because foreign portfolio investors are relatively active there.

The Saudi stock index fell 1.43 per cent to close at 7,479.24 points, while Dubai bourse was down by 1.53 per cent to end the session at 3326.47 points. Abu Dhabi’s index sagged 0.90 per cent as Dana Gas tumbled 4 per cent.

In Qatar, the index lost 1.73 per cent as falling stocks outnumbered gainers by 34 to two. Kuwait and Bahrain bourses were also down by 1.31 per cent and 0.81 per cent, respectively.

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