Omani stock market retreats 1.58% amid oil price concerns and sector-wide declines

Muscat: The Omani stock market experienced a negative performance this week, with a decline of 1.58 percent after three consecutive weeks of positive gains, according to an industry expert.

“This downturn was largely attributed to the fall in oil prices at the beginning of the week, following a decrease in the risk premium on market prices due to diminished concerns about further escalations in the Middle East geopolitical situation,” said Ahmed Negm, Head of Market Research MENA at XS.com.

Despite this negative trend, the market witnessed the introduction of OQ Exploration and Production, which made its trading debut after a $2 billion listing, marking Muscat’s largest initial public offering on record. Although the company’s initial trading was marked by a decline, its strong fundamentals suggest a potential for recovery. The firm is backed by robust oil and gas operations, government support, and an attractive dividend policy of 75% of profits. The company’s solid financials and generous shareholder returns are expected to support long-term value creation, which could also positively impact the market in the medium and long term.

In terms of sector performance, all sectors experienced declines. The Industrial sector led the downturn, suffering a significant loss of 2.87 percent. Within this sector, Al Anwar Ceramic saw a sharp decline of 5.19 percent, while Galfar Engineering and Contracting decreased by 1.82 percent. Oman Cement also faced a minor reduction of 0.26 percent.

The Financial sector demonstrated similar weakness, recording an overall decline of 1.09 percent. The banking industry particularly contributed to this downward trend. Bank Muscat, a major player in the sector, saw its value decrease by 2.27 percent, while Sohar International Bank experienced one of the steepest declines, falling by 6.80 percent. Following this trend, Bank Nizwa recorded a significant drop of 2.86 percent. Adding to the sector’s challenges, Ominvest also faced pressure, declining by 2.41 percent.

Lastly, the Services sector saw a decline of 0.73 percent. This was mainly due to the performance of OQ Exploration and Production, which declined by 6.41 percent, and OQ Gas Network, which saw a similar decrease of 2.84 percent.