Muscat: Dividend announcements of Omani listed companies will help the market to take a new direction in the short-run, according to stock market analysts.
Listed companies on the Muscat Securities Market (MSM) have already announced financial results for 2017, while decisions on dividend payment will be taken by the boards some time in March.
“Dividend payout levels will be maintained at last year’s levels,” said Joice Mathew, Head of Research at the United Securities.
“If you look at the market, the stocks that are witnessing upward trends are those companies that reported good numbers,” added Mathew, pointing out that the market direction is now on the basis of fundamentals and dividend yield.
Since majority of annual general meetings for giving approvals for dividend proposals are scheduled for March, investors will receive actual payment only by the first week of April.
“The earnings of Omani companies were down, which means that there will be a marginal decline in dividends of companies. The earnings outlook will also be important,” added another market analyst on condition of anonymity. “Since the market has fallen, dividend yield will be still attractive,” added the analyst. Although oil prices have firmed up to around $65 per barrel, MSM 30 Index – the barometer of market movement – has declined by 122.05 points or 2.39 per cent since the beginning of the year.
Also, an indication on whether listed companies will maintain total dividends for 2017 at the previous level is yet to emerge. Omani listed companies have paid a total dividend of approximately OMR350 million last year. Traditionally, telecommunication, oil marketing firms and utilities are the dividend pay masters in Oman.
Market analysts revealed that the corporate earnings are affected by an increase in corporate income tax rate and utility charges. Industrial firms, including cement and cable manufacturers, were also affected by an increase in power tariff.
The trading activity on the bourse declined to a daily average of OMR2-3 million turnover this year. As many as 130 companies are listed on the Muscat Securities Market, but a section of listed firms will not offer any dividend due to losses.