Oman's stock market faces third consecutive week of losses

Muscat: Oman’s stock market experienced losses for the third consecutive week, reaching a new low for the year, according to an analyst. “The MSX 30 index declined rapidly since the middle of October and moved below the range within which it was able to maintain itself since the beginning of the year. The market could remain on a downtrend although it recorded a brief period of stabilisation in the middle of this week,” Ahmed Negm, Head of Market Research MENA at XS.com, said.

The three key sectors of the stock market recorded losses, mirroring the previous two weeks’ performances. The services sector declined the most and saw a 1.71 percent decrease, followed by the financial sector at -1.33 percent, and the industrial sector at -1.17 percent. Market activity plummeted significantly compared to the previous week but remained somewhat elevated. Trading volumes decreased by 60 percent while the value traded retreated by 63 percent and the number of trades by more than 31 percent.

OQ Gas Networks (OQGN) continued to dominate the stock market’s activity, representing 70 percent of the total volume traded. The company’s initial public offering (IPO) has resulted in a strong increase in trading volumes.

However, OQGN’s stock price declined with the rest of the market. In the services sector, Abraj and Ooredoo also fell, recording 1 percent and 6 percent losses respectively.

Bank Muscat, the second most traded stock in the market, rose slightly this week, stabilising to a certain extent but remained well below the levels seen during the last few months. However, most other stocks in the financial sector were recording significant losses with Oman Arab Bank (OAB) recording the largest decline among banks.

“In contrast, other stock markets in the GCC region ended the week positively and were able to rebound to a certain extent and recoup some of the losses recorded since the flare-up in geopolitical tensions in the Middle East,” Ahmed Negm said. “However, uncertainty on the matter could continue to weigh on performances in the region due to the concerns of an impact on local economies,” he added.

Markets also reacted to the Federal Reserve’s decision this week to leave its interest rates unchanged for the second time in a row. “While the Federal Reserve left the door open for another rate hike this year, market expectations have shifted toward a softer path in monetary policy with rates potentially declining toward the middle of next year,” Ahmed Negm said. “However, high-interest rates could continue to weigh on the local economy and the stock market’s performance,” he further added.