Thursday 29 / May / 2025
Muscat: The Omani stock market was able to rebound this week after a series of price corrections and the market could be heading for another bout of gains and a return to its uptrend, according to an industry expert.
“Contrary to other markets in the region, Omani stocks were able to see more sustained growth from 2020 and were less impacted by global factors and the decline in energy prices,” Daniel Takieddine, BDSwiss CEO Mena, said.
“The market was able to find some support in a solid local banking sector in particular at a time when turbulence has roiled banks in the US and Europe and has eroded international investors’ confidence,” he further said.
Oman’s benchmark index of the Muscat Stock Exchange (MSX) closed at the end of last week’s trading at 4,811 points, recording a weekly increase of 54 points.
The financial sector index rose 131 points, the industrial sector index 3 points, and the Sharia index 1 point, while the services sector index recorded the only decline after it fell to the level of 1685 points, down 25 points.
Last week witnessed the flow of preliminary financial statements for the first quarter of this year, which showed an increase in the profits of banks and companies operating in the financial sector.
In this regard, most banks have reported strong increases in their profits for the first quarter of this year compared to the same period last year. Unlike some US banks, Omani financial institutions have been able to withstand rising interest rates and have benefited from a more stable and diversified customer base, c. “However, they could face some challenges as economic growth is expected to slow down compared to the previous year,” he further added.
Omani banks could continue to attract investors’ attention due to the consolidation potential in the sector. In this regard, Bank Dhofar made an offer to Ahli Bank which was declined. The initiative could potentially prompt other banks to move in this direction. Smaller banks could vie to close the gap with Bank Muscat in terms of size. Successful mergers could help improve banks' competitiveness and operating conditions, which could in turn be a positive factor for the stock market.
Over the medium to long term, the Organisation of Petroleum Exporting Countries (Opec) oil production cut could play in Oman’s favour as it raised the baseline for crude prices and could help push the energy market to the upside, in particular, if the Chinese demand rebounds more strongly. “Oil prices have been trending higher even before the cut with demand expected to exceed supplies. This trend could provide better support for banking and other non-oil sectors, which could help the main index drive more gains in the coming weeks,” Takieddine said.
Investors could keep an eye on developments in other regional and global markets. GCC stock markets will face a shortened trading week with the Eid al-Fitr holidays, leaving a minimal window for traders to react to the rapidly changing global economic conditions. As a result, markets could see some volatility during the following week. In the meantime, Emirati stock markets could record good performances thanks to the solid local economic fundamentals with Dubai in particular extending gains. The Abu Dhabi stock market could recover to a certain extent as well if oil prices remain stable.
Takieddine further explains that US inflation and job market data releases have been major influences on market movements this week as investors evaluate the direction of the US economy and the reaction of the Federal Reserve at the next meeting in May. Expectations have shifted toward a softer stance from the US central bank. Markets in the US and Europe could see significant volatility next week with the start of earnings season. Investors could remain cautious as banks release their figures in particular since some concerns linger about the health of financial institutions.
In addition to company earnings, traders could focus on several economic data releases next week. Chinese GDP growth figures are expected on Tuesday and could affect expectations on crude demand from the country and oil prices in the process. Eurozone inflation figures are scheduled on Wednesday and could impact investors’ views on monetary policy. For the moment, the European Central Bank is expected to continue raising interest rates but in smaller increments.
