Muscat: The total dividend payout of Omani listed companies for 2017 is expected at OMR330 million and will be paid after the annual general meetings in April.
According to the Muscat Securities Market (MSM), more than 10 companies have already announced dividends and other listed firms are expected to declare dividend proposals after their board meetings in the next couple of weeks.
“It (dividend announcements) is more or less the same in absolute terms, when compared with the previous year’s dividend. Banks have reported stronger dividends,” Kanaga Sundar, head of research at Gulf Baader Capital Markets, told the Times of Oman.
The capital adequacy ratio of banks is strong, and that is the reason for higher dividend announcements by banks.
“The dividend announcements of banks were better than our expectations,” said Suresh Kumar, head of research at Al Maha Financial Services. Kumar noted that the dividend expectation of industrial and services sector companies was lower, as the net earnings of these companies declined, as compared with the previous year.
Sundar added that the recent fall in share prices aided an increase in the dividend yield of several companies on the Muscat bourse, which is a positive sign for attracting investment.
The four major blue chip companies that paid maximum cash dividend on the local bourse were Shell Oman Marketing Company (85 per cent), Oman Refreshment Company (75 per cent), Oman Oil Marketing Co (60 per cent), and Bank Muscat (35 per cent).
Among other firms, Bank Sohar recommended a 15 per cent dividend, while BankDhofar and the National Bank of Oman plan to pay 20 per cent each. Also, the Oman Packaging Co (20 per cent), United Finance (3.5 per cent), and HSBC Bank Oman (5.7 per cent) also declared dividends for 2017.
Sundar remarked that investors were likely to reinvest their dividend money in the market, which will help enhance market liquidity. This, however, will also depend on the market outlook.
The investor community will opt for deploying their dividend money in the market rather than depositing it in banks due to a better market outlook and low interest regime. Some dividend-related adjustment or corrections can be seen towards the end of March. But when the dividend money comes back in April, the local bourse is expected to recover. As many as 130 companies are listed on the MSM. The market trend in the coming quarters will improve mainly due to a firm trend in oil prices. New projects floated for development and timely payment of completed projects will drive the market sentiment. “The government is in a much more comfortable position,” noted Sundar.
Kumar further said that the firm trend in oil prices, an increase in government revenue, a fall in budget decline and attractive valuations are positive factors that could prop up the market sentiment.