Shares at the Muscat Securities Market (MSM) recorded gains for the second straight day on Monday as a historic oil production cuts agreement between OPEC and other major producers boosted hopes of global crude price recovery.
Oman’s benchmark MSM30 index jumped by 50.87 points or nearly 1.5 per cent on Monday and closed at 3,542.37 points on expectations of recovery in oil prices and its positive impact on Oman’s economy.
“The market is up on support from domestic investors. The confirmation of OPEC+ oil production cut deal has helped in improving the investor sentiment. Oman is the outperformer among GCC markets on a relative basis,” said Joice Mathew, head of research at United Securities.
The MSM30 index has recovered over 200 points after touching multi years low earlier this month as the stocks were hammered by the dual impact of steep decline in oil prices along with fears of global outbreak of COVID-19 pandemic.
Late Sunday, oil producing countries’ group OPEC and Russia said they had agreed to reduce output by 9.7mn barrels per day for May-June, after four days of marathon talks.
According to Mathew, attractive valuations and timely dividend payments are the major attractions in the Omani market this time. He said, “While many regional companies scrapped dividends this year, Omani companies stood apart, and paid all the dividends. Also, we are seeing a portion of the dividend money coming back to the market at lower price levels in financial and service sector stocks, which are supporting the prices.”
Oman’s stock market, which suffered least damage among the GCC markets following the global outbreak of COVID-19, was also supported by recovery in European stocks following the reports of fewer COVID-19 deaths and decline in the number of new patients of COVID-19 in euro zone.
Data provided by the MSM indicated that the total value of trades on Monday was RO1.8mn, which is 71.46 per cent higher than the RO1.08mn the market recorded on Sunday. It also indicates that the total market capitalisation of MSM rose by 0.45 per cent on Monday to RO18.27bn.