Omani stocks rebound, closing near its peak in mid-September

Muscat: The Omani stock market saw more volatility during the trading sessions of the last few days compared with the week before, during which it recorded limited price movements, according to an analyst. The main index was able to rebound to a certain extent, closing near its peak in mid-September.

“Its performance contrasted with the constant declines of last month and the index drew closer to the range within which it traded horizontally during July and August,” said Daniel Takieddine, CEO MENA BDSwiss. “However, the main index could find some resistance at the bottom of its previous range and could be exposed to some selling pressure if traders move to secure their gains,” he added.

The market’s rebound was driven by the financial sector’s performance in particular as it was able to climb above its previous peak. The financial sector recorded a 1.05 percent increase this week, followed by a quasi-stagnant services sector and a negative performance from the industrial sector.

“The services sector maintained its volatile performance week after week and could continue to weigh on the market’s performance although it was able to approach its mid-September level. The industrial sector however continued to pull the main index down, recording new losses and extending its multi-month decline,” he said.

Banks represented more than 37 percent of the trading volumes and more than 33 percent of the value traded with Bank Muscat and Sohar International Bank taking the lion's share this week. The banking industry in particular could continue to see a strong performance thanks to its resilience and the healthy growth in loans as well as the elevated interest rate level. “In this regard, the current path in monetary policy could see interest rates remain at a high level well into next year which could leave banks with favorable conditions if the rest of the economy maintains its strength,” said Daniel Takieddine.

The market has also seen a number of positive credit rating events this week as S&P raised Oman’s credit rating to BB+, following in Fitch’s footsteps. The latter also raised the credit rating of Oman Telecom, contributing to the stock’s performance this week and to the overall market rebound. Those rating improvements and others of unlisted companies could help improve investors’ sentiment overall in addition to the interest in OQ Gas Networks’s ongoing IPO.

However, the market could be facing some pressure if oil prices continue to decline. “Crude markets have been recording significant losses after hitting a peak late last month after concerns about US monetary policy flared up, fueling fears over its impact on demand levels,” said Daniel Takieddine.