Muscat bourse touches five-year low on falling oil prices

Muscat: Falling crude oil prices started pulling down the local bourse with the share prices touching a five-year low.
Muscat Securities Market (MSM) touched 5,289.34 points on Tuesday, shedding 48.1 points or almost one per cent amid global crude prices touching to a 12-year low, which triggered fears of an economic slowdown.
“The primary reason for market fall is that the crude oil prices (WTI) touched a 12-year low of $30 per barrel,” said Suresh Kumar, head of research at Al Maha Financial Services. “All regional markets are down.”
Oil extended declines from the lowest close in more than 12 years before United States government data forecast to show crude supplies expanded, exacerbating a global glut. Futures fell as much as 3.2 per cent in New York after dropping 5.3 per cent Monday.
Local and foreign investors must have lost OMR175 million in market capitalisation (excluding closely held companies) in the last eight trading sessions since the beginning of the year, as market capitalisation fell to OMR10.225 billion on Tuesday from OMR10.400 billion by the end of last year, added Kanaga Sundar, head of research at Gulf Baader Capital Markets.
“Omani bourse has declined by 2.2 per cent since the beginning of the year. It is less compared to other regional markets,” added Sundar.
Suresh Kumar said that the market is likely to remain weak since foreign investors started selling their stocks. “Foreign investors were net sellers on majority of trading sessions since the beginning of January.”
Traded volumes on the Muscat bourse substantially fell — from an average daily turnover of OMR5.6 million last year to OMR2.2 million daily turnover this year.
However, Suresh Kumar pointed out that it is an attractive opportunity for long term investors. “If you see the valuation, more than 50 per cent of MSM 30 index stocks are trading below their latest book value. The overall bearish sentiment offers opportunity for long-term investors since stock are available at low valuations,” added Suresh Kumar. Blue chip shares are trading at five-year lows. Also, the dividend yield of the market is also attractive with the fall in share prices.
Muscat Securities Market declined by 14.77 per cent or 937 points to close at 5,406.22 points last year, primarily hit by falling oil prices.