0By: Gulam Ali Khan

MUSCAT: Increased participation by Omani institutions and foreign investors in the past few days has sent the MSM30, the general index of the Muscat Securities Market (MSM), to a nearly six-year high.

The general index breached the 7,500-level on Sunday before closing at 7,496.65, its highest level since October 15, 2008 when the global financial crisis sparked off.

Analysts believe that the current rally is driven by increased participation from Omani institutions and foreign investors who are mainly buying into blue chips.

“Since the beginning of 2014, Oman had been a laggard among GCC markets, but now the sultanate is gaining momentum. Initially buying came from foreign investors but now local institutions are also participating. We have seen good participation in front-line stocks,” said Hunaina Banatwala, AVP of institutional sales at Gulf Baader Capital Markets (GBCM).

On Sunday, Omani institutions accounted for over 62 per cent of total buying turnover while foreign institutions’ share was 17 per cent. Individual investors’ participation was 21 per cent. Average daily turnover on the MSM this year has been RO9.4mn, 2.5 per cent above the 2013 average of RO9.16mn.

Hunaina added that despite geopolitical tensions, global and regional markets are doing well – which is positive for Oman.

“Our initial target for the year-end was 7,500, which has already been achieved. Oman’s banking sector is doing well, and this is key for the market. From this level, we expect another three to five per cent increase to 7,800-levels by the year-end. Participation from local institutions and foreign investors is likely to drive up the market further.”

The MSM30 is up 9.7 per cent year-to-date. Total market capitalisation touched RO15.75bn on Sunday and has gained 10.03 per cent this year. Alaa el-Din Moustafa, general manager at EFG-Hermes, said that blue chips, such as Bank Muscat, are attracting lots of activity in the market.

“Market conditions are looking good with increasing liquidity. When the index broke its resistance at 7,400 activity started picking up across all shares. We expect the market to stabilise at 7,500-levels in the coming days with a positive trend towards the end of the year,” he said.

Despite multi-year highs, Oman has remained one of the worst performing markets in the GCC this year. On a year-to-date basis, the Saudi Arabian index has gained 34 per cent, while Dubai and Abu Dhabi are up 52.8 per cent and 24 per cent, respectively. Bahrain and Qatar have recorded 23 per cent and 39 per cent gains.