Attractive trading multiples and regional investors lift market up

Market was up every day of the week last week, supported by attractive valuations and trading multiples along with net buying from investors of GCC amounting to $2.65 million.

The MSM30 ended the week up by 2.24 per cent at 3861.5. All the sub-indices closed higher. Financial, Industrial and Services Index were higher by 2.14 per cent, 1.30 per cent and 0.91 per cent, respectively. Shariah Index also closed up by 1.34 per cent.

The Sultanate has pledged investments to the tune of around $7 billion in the further development of a countrywide wastewater treatment, recycling and reuse infrastructure system over the next two decades as part of Oman’s commitment to ensuring sustainable freshwater availability and supply over the long term. Through the National Strategy, Oman seeks to expand the construction of sewage treatment plants and extend sewage network lines at an average cost of $381 million a year.

Oman Fisheries announced investment in Al Duqm Fisheries Investment LLC at 22.5 per cent of its capital. Oman Fisheries announced investment in a limited liability company which has a capital of RO 300,000. The company is engaged in projects related to fish investment in the Economic Zone of Duqm, signing contracts ?with companies to manage and operate fishing port and export and import activities. Oman Fisheries has invested RO 67,500 or 22.5 per cent of the capital. ?

Oman’s leasing sector reported a total net income of RO 3.92 million in 2Q19: down 13.0 per cent QoQ and 28.6 per cent YoY.? Oman’s leasing sector reported a total net income of RO 3.92 million in 2Q19 compared to RO 4.51 million in 1Q19 and RO 5.49 million in 2Q18. Drop in the profitability on QoQ basis resulted largely because of drop in income of Muscat Finance (due to ?irregularities in a customer account as per the company disclosure), and Taageer Finance. For 19, the sector profit dropped by 24.2 per cent to RO 8.43 million compared to RO 11.11 million in 18, mainly due to ?drop in net profit of National Finance, Al Omaniya Financial Services and Muscat Finance. Taageer Finance grew its ?net profit by 46.7 per centYoY in 19 on higher income. ?

Omantel reported a net profit attributable to its shareholders of RO 18.3 million in 2Q19 compared to RO 19.5 million in 2Q18 and RO 14.9 million in 1Q19. For the half year period, the profit amounted to RO 33.2 million compared to RO 32.9 million in 18. Consolidated revenue was higher on YoY basis by 41.9 per cent and 0.3 per cent QoQ at RO 630 million in 2Q19. Revenue during 19 was up by 37.7 per cent at RO 1.259 billion.

Sizable revenue growth during 1H-2019 was largely due to consolidation of Zain KSA whereas in 18 Zain KSA was treated as an associate. The increase in performance at group level was due to exceptional performance of Zain group markets in Kuwait, KSA and Iraq. Omantel’s domestic operations witnessed a revenue and bottom line decline of 7.4 per cent and 8.8 per cent, respectively during 19. Performance on the domestic front was subdued due to market saturation in the mobile segment.

CBO’s foreign assets reached RO 6.12 billion at the end of Jun’19, flat on YoY basis and down 1 per cent MoM, remaining below the TTM simple average of RO 6.15 billion. These assets include bullion, IMF reserve assets, placements abroad and foreign securities. Latest figures from NCSI Oman reveal that Oman’s narrow money supply (M1) increased by 1.4 per cent MoM and 0.1 per cent YoY. Broad money (M2) supply rose by 0.2 per centMoM and 4.0 per centYoY in Jun’19, indicating an increase of RO 26 million in domestic liquidity on MoM basis.

Among GCC markets, Qatar was the worst performing market and it closed lower by 5.41 per cent while Oman was the only market which closed higher last week, ending up by 2.24 per cent.

Saudi Arabia registered a 10.36 per cent year-on-year rise in the US treasury bonds during May 2019, raising its stake of the US treasuries for the fourth month in a row.

Saudi Arabia’s holdings of the US treasury bonds rose to $179 billion in May this year when compared to $162.2 billion in May 2018, according to the US Department of the Treasury. On a monthly basis, Saudi Arabia’s holding of US treasury securities rose by 1.36 per cent, compared to $176.6 billion in April 2019. Since the beginning of 2019, Saudi Arabia has increased its holding of the US treasury securities by 4.3 per cent, or $7.4 billion, compared to $171.6 billion in the end of fiscal year 2018.

Bahrain, whose neighbours pledged a $10 billion support package to the kingdom last year, narrowed its budget deficit in the first half as it implements a fiscal programme to shore up its finances. The actual budget deficit dropped to BHD 404 million ($1.1 billion) from BHD 650 million a year ago.

Revenue increased by 18.8 per cent to BHD 1.27 billion against BHD 1.07 billion last year. Expenditure decreased by 2.5 per cent to BHD 1.68 billion against BHD 1.72 billion last year.

Source: Oman Observer