x Abu Dhabi, UAEMonday 24 July 2017

Signs look better for Muscat exchange's future

 

Improved relations between analysts and companies needed

Oman may not yet be known as a centre of investor relations excellence but local industry leaders say the market is slowly improving.

The biggest challenge lies at the interface between companies and the analysts seeking to assess them, said Ahmed Humaidi, the head of the fledgling chapter of the Middle East Investor Relations Society.

"We play an important role in educating listed companies on disclosure and dealing with analysts," said Mr Humaidi, who is also the investor relations manager at Nawras, a telecommunications company that debuted on the Muscat exchange in November 2010 in what was then its largest listing in five years.

"We have an important role to play because investor relations was not well introduced in Oman," Mr Humaidi said.

"The area some companies need to work on is handling analysts and lots of them do not have a dedicated department to handle investor relations."

He warned investors would often simply move on to the next company when faced with such an information vacuum.

Suleiman bin Mohammed Al Rashidi, the deputy director general of operations and market surveillance at Muscat Securities Market, stressed it was well regulated and the level of disclosure was relatively well developed compared with some of its Gulf peers.

"It is a very strong institutional market with about 89 per cent of shares owned by institutions," he said.

The government has considered listing the shares of the market itself in a similar way to the Dubai Financial Market but the plan has not progressed.

"The conditions were not positive enough to be attractive to investors," said Mr Al Rashidi.

While the analysis may not inspire confidence among other Omani companies considering a listing, it reflects a global investor apathy with equity markets.

* Sean Cronin