New initiatives to help revitalise trading on MSX

Business Saturday 08/July/2023 17:39 PM
New initiatives to help revitalise trading on MSX

Muscat: A number of ground-breaking measures announced recently by Muscat Stock Exchange (MSX) will contribute to revitalising trading and help in achieving stability in the bourse

The importance of the initiative is to easily provide liquidity for securities and maintain a state of balance between supply and demand, in addition to limiting the presence of offers to buy or sell securities without being matched by purchase or sale requests on the other side.

Mustafa bin Ahmed Salman, Chairman of the Board of Directors of the United Securities Company (one of the companies licensed as market makers), expected that the initiatives announced by the Muscat Stock Exchange would contribute to revitalising trading and achieving stability for the stock exchange.

In a statement to Oman News Agency, he confirmed that these initiatives are in line with the directions of a number of brokerage firms operating in the Muscat Stock Exchange, pointing out that the United Securities Company is keen to be proactive in expanding activities and services that contribute to the revitalisation of the stock exchange due to the company's experience in this field.

He noted the importance of the new initiatives and said: “This activity gives the licensee the ability to place different orders at different levels on an ongoing basis. It contributes to creating a kind of depth in the stock exchange and presence in the traded companies.”

“This activity is very important because it gives reassurance to investors that there are permanent requests and permanent offers on companies. This provides liquidity and the ability to invest or exit at the right time, and to create a continuous movement in the shares, so the pricing process for these companies will be more efficient,” he added.

Mustafa bin Ahmed Salman explained that to start the activity of the market maker, the company first needs to train a specialised work team to follow up with the companies and set mechanisms for trading, and in addition to that, it is necessary to find electronic systems that place fast, multiple and continuous orders at different levels automatically and actively, based on the equations added by the work team after observing news and information that may affect the general direction of the company. Continuous studies should be found that deal with technical analysis levels of stability, support and resistance. Accordingly, the appropriate times to move and place orders are chosen and the levels of these orders in terms of margin ratio. “We have developed a procedures guide that governs the trading process and how to deal with it and its goals and ethical standards,” he said.

Mustafa bin Ahmed Salman said: “Allocating a fund to support the stock exchange with a size of OMR100 million is a very positive step to give investors a guarantee regarding the availability of liquidity in the stock exchange. We must be aware that when the investor starts trading in the public markets, he expects to invest in companies that he can sell and exit at the appropriate time.”

“This is a different investment from investing in closed companies, and if the stock market loses liquidity, it loses the elements of attractiveness, and therefore the presence of this fund is very important and gives reassurance to all investors, whether he is a local or foreign investor, and this importance changes the method of evaluating companies by giving them better pricing and thus will gradually cancel the discount that it is calculated on companies when evaluating as a result of the decrease in the trading of their shares.”

He stressed that the revitalisation of the stock exchange will reflect positively on the movement of new listings and encourage companies to convert into public shareholding companies and list their shares on the stock exchange.