Capital Markets
From The Report: Oman 2015
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Capital markets in Oman continued to post healthy growth over the course of 2013 and 2014 with strong fundamentals, steadily increasing economic diversification and prudent market regulation and oversight driving expansion. In mid-2013 the Capital Market Authority launched the MSM Sharia Index which tracks sharia-compliant stocks, and in August 2014 insurance sector reforms were introduced aimed at encouraging more corporate listings. Government plans to float $517.9m of sukuk will go ahead in 2015 and have the potential to jumpstart further issuances in the sector. Smaller companies look set to benefit from Oman’s growing capital markets as the regulator moves to attract greater SME participation through a range of incentives including the expected introduction of an SME index and the CMA’s roll-out of a comprehensive SME strategy in 2015. This chapter contains interviews with Sheikh Abdullah bin Al Salmi, Executive President, Capital Market Authority (CMA); and Khalid M Al Zubair, Managing Director, The Zubair Corporation; and Chairman, Ominvest.
Articles from this Chapter
New regulations and solid growth bode well for future prospects
Sheikh Abdullah bin Al Salmi, Executive President, Capital Market Authority (CMA): InterviewOBGplus
Interview:Sheikh Abdullah bin Al Salmi How is the CMA working to further involve capital markets in development project funding? SHEIKH ABDULLAH BIN AL SALMI: Since the establishment of the CMA we have focused on ensuring that the regulatory framework is sound, transparent, effective and stable. We are now working to transform the sector into a meaningful engine for economic growth, as seen through the success of Oman’s capital market in recent years. Indeed, twice as much business funding…
New regulations are expected to boost sukuk issuance in the sultanateOBGplus
In January 2013 the Capital Market Authority (CMA), Oman’s capital markets and insurance sector regulatory agency, released draft regulations covering the issuance of sukuk – sharia-compliant debt instruments that function much like conventional bonds. Sukuk are the latest in a series of Islamic financial institutions and products to be introduced since 2011, when the Central Bank of Oman’s (CBO’s) “Islamic Banking Regulatory Framework” (IBRF) came into effect, authorising a wide variety…
The regulator takes a new approach to encourage listings from SMEsOBGplus
The capital markets sector is expected to play a key role in the government’s ongoing push to encourage the development of small and medium-sized enterprises (SMEs). A focus of the government’s plans since the mid-2000s, SMEs are seen as integral to Oman’s future for a variety of reasons. They drive private sector growth, much of it in the non-oil economy, and create jobs along the way. Indeed, the effect of SMEs can be seen across other sectors. “Government spending and the increasing focus…
Khalid M Al Zubair, Managing Director, The Zubair Corporation, and Chairman, Ominvest: InterviewOBGplus
Interview:Khalid M Al Zubair How can the capital markets sector best support the growth and diversification of the economy? KHALID M AL ZUBAIR: The capital markets sector acts as a catalyst and an intermediary between retail and institutional investors and institutions seeking capital. The capital market in Oman is no different. As the market matures and grows, various factors change, including the regulatory environment, investor maturity and the market appetite for financial products. This…
InvestmentOBGplus
Al Anwar Holding Company is an investment holding company originally formed in 1994 for investments in industrial ventures such as power, oil and gas, glass, paints and certain other industrials. The company undertakes private equity investments with a primary focus on the GCC region. Al Anwar has historically targeted investments in growing small and medium-sized businesses. Through local and international alliances, the company tries to groom and grow these investments into large companies. Since its founding, Al Anwar has diversified away from its traditional focus on the industrial sectors into the financial sector, by investing in leasing…
Bank Sohar: BankingOBGplus
Bank Sohar was established in March 2007 as a commercial bank following an initial public offering (IPO) in December 2006. The bank was launched with authorised capital of OR100m ($259m) and paid-up capital of OR50m ($129.5m). The bank has since grown its balance sheet substantially to become the fourth-largest bank by assets in Oman. The bank’s total assets grew from OR420m ($1bn) at end-2007 to OR1.88bn ($4.6bn) by end-2013. In 2009, three years after its founding, the bank reported its first profit, with profits having grown every year since thanks to expanding loan assets and interest income. However, since 2011 the bank has focused more…
Electricity generationOBGplus
Two Omani electricity generation companies – Al Batinah and Al Suwadi – opened their initial public offerings (IPOs) in May 2014. Al Batinah offered 236m shares at a price of OR0.128 ($0.33), totalling OR30m ($77.7m), while Al Suwadi offered 250m shares at a price of OR0.13 ($0.34) per share, for a total of OR32m ($82.9m). Both offered to sell 35% stakes to the public in order to comply with Omani regulations (power plants that are majority owned by foreign investors must conduct IPOs within five years of starting operations). At the IPO price, both companies offered an attractive dividend yield of around 8%, against an average of 6.5% for…
EnergyOBGplus
National Gas commenced its liquefied petroleum gas (LPG) bottling operations in 1981 and is currently engaged in the selling of LPG cylinders for retail consumption. In 2012 the company, through an indirect subsidiary, acquired Shell Malaysia’s LPG assets and business in West Malaysia. The company’s largest shareholder is the A’Sharqiya Investment Holding Company, which has a 15% stake in the company. Cylinder pricing in Oman has been a challenge for National Gas, as the regulator has instituted a price ceiling for the local market. For the last several years, this has impacted National Gas profitability significantly, and the company is…
ManufacturingOBGplus
Oman Cables is one of the largest makers of power cables, building wires, instrumentation cables and overhead transmission line conductors in the GCC region. The company is intrinsically tied to growing demand for electricity in Oman, which is expected to increase by 10% per annum over the next several years, thereby boosting the local demand for cables as well. Oman Cables has the capacity to procure and process up to 90,000 tonnes of copper annually. Oman Cables owns 51% of Oman Aluminium Processing Industries (OAPI), which was established in 2008 as a joint venture between Oman Cables and Takamul Investment Company. The project has been successful…
ManufacturingOBGplus
Oman Cables is one of the largest makers of power cables, building wires, instrumentation cables and overhead transmission line conductors in the GCC region. The company is intrinsically tied to growing demand for electricity in Oman, which is expected to increase by 10% per annum over the next several years, thereby boosting the local demand for cables as well. Oman Cables has the capacity to procure and process up to 90,000 tonnes of copper annually. Oman Cables owns 51% of Oman Aluminium Processing Industries (OAPI), which was established in 2008 as a joint venture between Oman Cables and Takamul Investment Company. The project has been successful…
TelecommunicationsOBGplus
Omantel is the largest telecoms operator in Oman, with a total subscriber base of 4.17m and market share of 59% as of June 2014. The company had a monopoly over the Omani telecoms sector until 2005, when Ooredoo Oman (then Nawras) came into the market as the second operator to offer mobile and fixed services. As of 2013, the government of Oman held 70% of the company; however, after selling 19% to the public in a secondary offering in April 2014, it is now left with 51%. Omantel’s subsidiary companies are WorldCall Telecom in Pakistan, of which Omantel owns 56.8%, and Oman Data Park, with a 60% stake. Omantel recently had a change in management,…
TelecommunicationsOBGplus
Omantel is the largest telecoms operator in Oman, with a total subscriber base of 4.17m and market share of 59% as of June 2014. The company had a monopoly over the Omani telecoms sector until 2005, when Ooredoo Oman (then Nawras) came into the market as the second operator to offer mobile and fixed services. As of 2013, the government of Oman held 70% of the company; however, after selling 19% to the public in a secondary offering in April 2014, it is now left with 51%. Omantel’s subsidiary companies are WorldCall Telecom in Pakistan, of which Omantel owns 56.8%, and Oman Data Park, with a 60% stake. Omantel recently had a change in management,…
