Omani stock market continues to record gains in weekly trading

Muscat: The Omani stock market continued to record gains this week, extending its rebound to almost a month of increases, according to an analyst.

In the process, the main index approached the top of its previous trading range where it could find some resistance.

“The surge could also come under pressure if traders move to secure their gains as global concerns could affect sentiment,” Khaldoun Hilal, Chief Executive Officer KAMA Capital, said.

The main index improved despite another decrease in trading volumes which have been declining week over week for a month after a peak in the second half of September. Value traded remained resilient however thanks to the market’s performance and remained relatively stable compared to previous weeks.

The financial sector recorded another strong increase, closing its third week in a row to the upside and continued to lift the market. The services sector was also able to climb this week, seeing a better performance than the previous week. The industrial sector continued to retreat, losing ground compared to the rest of the market. Among financial stocks, the Oman Arab Bank recorded a strong performance, increasing more than 7 percent.

Other banks saw mixed performances while they remained on the positive side overall. However, National Bank of Oman fell after its earnings came lower than expected despite an upgrade in its credit rating at the start of the week to BB.

Bank Muscat, Bank Dhofar, Ahlibank and Sohar International Bank also saw their credit ratings improve, helping support the banking sector as a whole. Fitch’s credit rating upgrade came after Oman’s rating was raised by the same agency the previous week, raising the rating ceiling for national companies.

“Omani banks’ earnings remained on a positive trend overall while the sector continued to benefit from high interest rate levels and strong loan growth locally,” Khaldoun Hilal said. However, high financing costs could create additional pressure on the Omani economy as a whole while monetary policy remains restrictive.

“In this regard, traders’ attention could remain on the developments in US monetary policy while expectations change rapidly. US inflation data, the release of the Federal Reserve’s meeting minutes as well as comments from its governors have created concerns about the policy’s direction,” Khaldoun Hilal added.

“At the same time, concerns about the developments in the wider region as geopolitical tensions continue to increase could be a source of risks with traders monitoring the impact on the global and regional economies,” he added.

“Tensions could affect tourism and capital flows in the region and affect local financial markets’ attractiveness to a certain extent,” Khaldoun Hilal said.