The Muscat Securities Market (MSM) is contemplating to introduce trading of derivative instruments as part of a bigger plan to enhance the depth of the bourse. This is one of the recommendations of an international consultancy agency Atos Euronext to develop the market, Yahya bin Said al Jabri, Executive President of the Capital Market Authority (CMA) told the Observer.
Presently, the MSM deals only in two financial instruments, equity and bond. The proposal is being discussed by the board members of the Muscat Securities Market and CMA , Al Jabri added, on the sidelines of a function to launch the new trading system. The authorities will study the proposals carefully to introduce new instruments that suit the local market. We have been getting full support from the government , he noted.
Atos Euronext, a Paris-based solutions provider for securities industries, has come out with several recommendations on various fronts. Some of these can be implemented immediately, others for the medium-term and some others only in the long-term, added MSM Chairman Abdullah bin Salem al Salmi. Atos Euronext has suggested for effectively promoting the bourse to enhance the traded volumes.
The consultant was recently appointed by the bourse to study on the measures to be taken by the authorities to activate the bourse in the next five years. Al Jabri said the depth of Omani bourse was enhanced with the disinvestments of state-owned companies, especially the listing of shares of the Oman Telecommunications Company (Omantel).
The recent move to split shares, according to Al Jabri, will draw more and more investors to the bourse, resulting in better liquidity. Several companies that came out with financial results have also decided to split one-rial share into ten equal shares with a face value of hundred baisas.
Maqbool bin Ali Sultan, Minister of Commerce and Industry yesterday officially opened a new trading system at the Muscat Securities Market (MSM), which was developed by Europe s leading IT solutions provider Atos Euronext. But market operators have started using the new system almost a month ago. An important feature of the Euronext is that brokers can execute their orders from their offices, besides allowing trading of derivative instruments.
Also, Atos Euronext enables MSM to integrate with other Gulf Co-operation Countries (GCC) bourses, which is expected to enhance the trading volumes and depth of the market. The introduction of this internationally renowned system will enhance the confidence of the investors, especially in view of its easy usage and surveillance capability, said Ahmed bin Saleh al Marhoon, Director-General of the MSM.
It also enables an effective online supervision of both Capital Market Authority and the stock exchange. Al Marhoon said it took only 9 months for the authorities to implement the new trading system. This was exactly the period set when the programme for executing the project was prepared , he added.
It is more reliable with lots of additional features and will make trading on the bourse easier. The new system has more controlling devices, besides online updating tools, unlike the earlier trading system, which was tailor-made for the local bourse.
Euronext caters to the future requirements of the stock market, including the listing of new financial instruments. The Euronext trading has all the components to offer all those products and services that future stock market systems demand. Addressing the launch function, Al Jabri said the regulators have been taking adequate controls to protect investors and ensure stability in the market.
Saying that the Gulf bourses have witnessed unprecedented growth in share prices and traded volumes, he noted that it would not have been achieved without the confidence of investors. The Gulf stock exchanges will have to encourage co-operation and expertise to develop this vital sector, which will provide additional opportunity for investors. The new trading system was necessitated by large trading volumes on the bourse, in the aftermath of listing of Oman Telecommunications Company (Omantel).
John Oddie, Executive Vice-President of Atos Euronext, said his company has been working with clients in the Middle East since 1997. Five exchanges in the region are using our system now. We are committed to continue to invest in the region and to further develop our business here , added Oddie.