Muscat: The idea of privatising the local bourse to enhance its efficiency and performance was mooted by a top-level official of the Muscat Securities Market (MSM).
“We are the only market among the Gulf Cooperation Council (GCC) and other Arab countries that is still government-owned. Almost all exchange markets in the world, apart from very few, are privately owned,” Ahmed bin Saleh Al Marhoon, the MSM Director General, told Times of Oman on the sidelines of the Middle East Securities Forum here yesterday. “I do support the privatisation of the MSM.”
It can be handed over completely to the private sector or can become a shareholding between the government and the private sector, he added.
“That will give the MSM more flexibility and dynamism and will make the MSM stand on its own feet rather than relying on support from here and there.”
More IPOs needed
Commenting on the planned initial public offerings (IPOs) for this year, Al Marhoon said that the limited number of IPOs is one of the main challenges facing the local bourse.
“Liquidity is very low. We do not have enough free floats because of high ownership from other high net worth individuals,” he said.
“So, we need more IPOs to attract more investment in order to make the MSM play a major role in the prosperity of the country and provide more investment options. We would love to see more IPOs because that is the only way to attract more investment and the only way to give different options to investors and deepen the market,” noted Al Marhoon.
He appreciated the decision of Omantel to offer its shares, saying, “It is not because the government needs the money. The purpose is to support the market liquidity and it will help the MSM have more free floats in some good shares like Omantel.”
Omantel has offered 142.5 million shares or 19 per cent of government ownership in the company.
The first tranche has been already floated and the remaining will be offered before the end of this month., he added.
Upon successful completion of the private placement, the public issue of 71.25 million shares, which is envisaged as the second phase of the divestment process, is expected to be opened for Omani individuals by the end of March.
A number of other companies are expected to float initial public offerings this year. These companies are Al Suwaidi Power Co., Al Batinah Power Co., Al Maha Ceramics.
Oman Arab Bank
Sometimes a decision is made by companies to float public offerings but they change it due to various circumstances, Al Marhoon said. “For example, Oman Arab Bank (OAB) had announced on several occasions that they will go public, but recently they sent a letter to the MSM saying that they are not thinking of going public for the time being.”
Elsewhere in his remarks, the MSM official stated that the issuance of Islamic bond or sukuk is going to grow in the country.
Oman’s first corporate sukuk, which was for raising OMR50 million, was quite sizeable, he further added.