Muscat bourse completes 100% foreign ownership procedures for listed companies

Two or three government companies will be launched in the H2, 2022
Muscat bourse completes 100% foreign ownership procedures for listed companies
Muscat Bourse

The Muscat bourse has completed procedures for opening the market to foreign investment for companies listed on the stock exchange so that 100% ownership is availed to investors of all nationalities.

This reform measure, which means that companies listed on the Muscat Stock Exchange no longer need to be partially owned by Omani entities, will help the Sultanate diversify its economy away from oil, and improve trading standards in order to attract more global cash flows to it while on the other hand, benefit Omani companies.

This will also enhance the bourse’s accession to global indices of emerging markets.

Oman is seeking to catch up with developments recorded by Gulf countries in this field, especially in Saudi and the UAE, which decided to sell stakes in state assets through IPOs, thus attracting foreign investors.

The Muscat Stock Exchange had said in a tweet on the 28th  of March: “The Muscat Clearing and Depository Company has completed the procedures for canceling the ownership percentages for foreign investment, for companies listed on the stock exchange.”

The CEO of the Muscat Stock Exchange, Haitham Al-Salmi, expects an offering between two government companies and three on the stock exchange in the second half of this year as part of a government plan to list 35 government companies within 5 years, revealing that work is now underway to launch the market maker in coordination with the concerned authorities while allowing for short selling.

“The stock exchange’s goal is to open the way for foreign investment, and to complete all the necessary preparations to upgrade the market’s classification to an emerging market,” explains Al-Salmi.

He pointed out that the percentage of foreign ownership, including for Arab investors, has currently reached 28% of the market value, while the share of foreigners in the total trading does not exceed 4%, pointing to the rise in the shares available for foreign investment by 71%, and therefore the market has made great strides in raising the capital market values.

The Chairman of the Board of Directors of the Muscat Stock Exchange, Muhammad Al-Ardi, announced in January that one of the most important goals that the management of the Capital Market Board hopes to achieve soon is to upgrade the stock exchange from a frontier stock exchange to an emerging one, via rating agencies.

It is noteworthy that the Muscat Stock Exchange, one of the smallest financial markets in the Middle East and North Africa in terms of value, includes 76 companies active in many sectors compared to the Saudi “Tadawul” Stock Exchange, which includes 187 companies spread over 20 sectors, and is the largest in the Arab region.

In the past months, many reform measures have been introduced that contribute to making the stock market more attractive. Note that in January 2021, the Muscat Securities Market was transformed into a closed joint-stock company and renamed the Muscat Stock Exchange Company, and its ownership was transferred to the state-owned Oman Investment Authority.