Muscat: The Omani inventory market was in a position to rebound this week after a sequence of worth corrections and the market could possibly be heading for an additional bout of positive factors and a return to its uptrend, in accordance to an business professional.
“Contrary to other markets in the region, Omani stocks were able to see more sustained growth from 2020 and were less impacted by global factors and the decline in energy prices,” Daniel Takieddine, BDSwiss CEO Mena, stated.
“The market was able to find some support in a solid local banking sector in particular at a time when turbulence has roiled banks in the US and Europe and has eroded international investors’ confidence,” he additional stated.
Oman’s benchmark index of the Muscat Inventory Change (MSX) closed on the finish of final week’s buying and selling at 4,811 factors, recording a weekly improve of 54 factors.
The monetary sector index rose 131 factors, the commercial sector index three factors, and the Sharia index 1 level, whereas the providers sector index recorded the one decline after it fell to the extent of 1685 factors, down 25 factors.
Final week witnessed the circulate of preliminary monetary statements for the primary quarter of this yr, which confirmed a rise within the income of banks and firms working within the monetary sector.
On this regard, most banks have reported sturdy will increase of their income for the primary quarter of this yr in contrast to the identical interval final yr. In contrast to some US banks, Omani monetary establishments have been in a position to face up to rising rates of interest and have benefited from a extra steady and diversified buyer base, c. “However, they could face some challenges as economic growth is expected to slow down compared to the previous year,” he additional added.
Omani banks may proceed to entice traders’ consideration due to the consolidation potential within the sector. On this regard, Financial institution Dhofar made a suggestion to Ahli Financial institution which was declined. The initiative may doubtlessly immediate different banks to transfer on this path. Smaller banks may vie to shut the hole with Financial institution Muscat by way of measurement. Profitable mergers may assist enhance banks’ competitiveness and working situations, which may in flip be a constructive issue for the inventory market.
Over the medium to long run, the Organisation of Petroleum Exporting Nations (Opec) oil manufacturing minimize may play in Oman’s favour because it raised the baseline for crude costs and will assist push the power market to the upside, specifically, if the Chinese language demand rebounds extra strongly. “Oil prices have been trending higher even before the cut with demand expected to exceed supplies. This trend could provide better support for banking and other non-oil sectors, which could help the main index drive more gains in the coming weeks,” Takieddine stated.
Traders may hold a watch on developments in different regional and world markets. GCC inventory markets will face a shortened buying and selling week with the Eid al-Fitr holidays, leaving a minimal window for merchants to react to the quickly altering world financial situations. As a end result, markets may see some volatility throughout the next week. Within the meantime, Emirati inventory markets may report good performances thanks to the solid native financial fundamentals with Dubai specifically extending positive factors. The Abu Dhabi inventory market may recuperate to a sure extent as nicely if oil costs stay steady.
Takieddine additional explains that US inflation and job market information releases have been main influences on market actions this week as traders consider the path of the US financial system and the response of the Federal Reserve on the subsequent assembly in Might. Expectations have shifted towards a softer stance from the US central financial institution. Markets within the US and Europe may see vital volatility subsequent week with the beginning of earnings season. Traders may stay cautious as banks launch their figures specifically since some considerations linger in regards to the well being of monetary establishments.
As well as to firm earnings, merchants may focus on a number of financial information releases subsequent week. Chinese language GDP progress figures are anticipated on Tuesday and will have an effect on expectations on crude demand from the nation and oil costs within the course of. Eurozone inflation figures are scheduled on Wednesday and will affect traders’ views on financial coverage. For the second, the European Central Financial institution is predicted to proceed elevating rates of interest however in smaller increments.
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