Bright outlook surrounding the Sultanate's macro-economic scenario, despite the global economic meltdown, is paving the way for a robust Initial Public Offerings (IPO) market.The market saw two initial public offerings last year, namely, Bank Nizwa andAl Izz Islamic Bank . Although the investors' approach in 2012 was cautious with the annual market return being 1.2 per cent, these two IPOs were successful in raising capital in the market.
On the other hand, the market sentiment has been very encouraging in the current year with market return year to date being 15.6 per cent as compared to the annual market return of 6.1 per cent in 2010 and minus 15.7 per cent in 2011, says Suresh Kumar, head of research, Al Maha Financial Services.
The key factors determining market returns, including macroeconomic fundamentals, corporate profitability, overall market sentiment, liquidity in the market supported by local funds and foreign investors, are also good this year. This bodes well for future IPO activity.
The IPO market got off to a strong start this year with the IPO of Sharqiyah Desalination which stood out from the crowd as being the first-ever IPO for individuals only. With the market return on the rise this year, Oman is poised to produce significant IPO activity in 2013. As the overall market sentiment is favourable at present, experts expect higher investor participation in the IPOs this year.
After Sharqiyah Desalination , as many as six more IPOs are expected this year, which include Salalah Power, Al Batinah Power, Al Suwaidi Power, Al Maha Ceramics Co , Takaful Oman and Oman Arab Bank.
Salalah Power and Water Company, which owns and operates Salalah's $1 billion independent water and power project (IWPP), is planning to float an IPO this year.
Al Batinah Power Company and Al Suwaidi Power Company are also expected to run their IPOs this year or early 2014, floating 35 per cent of their shares, as per Authority for Electricity Regulation (AER) conditions.
The shareholders of Al Maha Ceramics Co are planning to divest 40 per cent of their holding in the company in favour of investing public through an IPO this year. Oman Arab Bank's IPO is also expected to hit the market this year.
Oman was always among the region's strong IPO markets. The pace in its IPO market looks set to pick up again this year.
The Gulf Co-operation Council (GCC) region experienced a slow start to the year with two IPOs in first quarter of 2013, a pattern similar to the previous quarter which saw the same number of listings. Although IPO volumes remained flat, total offering value increased more than three times to $377 million in first quarter 2013 compared to total proceeds of $78 million raised in the same period last year. In comparison with fourth quarter 2012, total offering value increased by 35 per cent from $250 million.
Companies in the MENA region raised around $2 billion through 14 IPOs in 2012, up 134 per cent from $843.9 million in 2011, according to a report by Ernst & Young. Saudi Arabia led the country standings in 2012, raising $1.4 billion through seven IPOs, followed by the UAE with $277 million and Oman with $264.4 million. Morocco and Tunisia were the only other MENA countries with IPO activity in 2012, said the report.
Suresh Kumar says short-selling, if allowed in the Muscat Securities Market, would bring along a number of benefits like increased investor participation and market turnover. It would also lead to better price discovery and higher revenues for financial intermediaries.
On the other hand, the market sentiment has been very encouraging in the current year with market return year to date being 15.6 per cent as compared to the annual market return of 6.1 per cent in 2010 and minus 15.7 per cent in 2011, says Suresh Kumar, head of research, Al Maha Financial Services.
The key factors determining market returns, including macroeconomic fundamentals, corporate profitability, overall market sentiment, liquidity in the market supported by local funds and foreign investors, are also good this year. This bodes well for future IPO activity.
The IPO market got off to a strong start this year with the IPO of Sharqiyah Desalination which stood out from the crowd as being the first-ever IPO for individuals only. With the market return on the rise this year, Oman is poised to produce significant IPO activity in 2013. As the overall market sentiment is favourable at present, experts expect higher investor participation in the IPOs this year.
After Sharqiyah Desalination , as many as six more IPOs are expected this year, which include Salalah Power, Al Batinah Power, Al Suwaidi Power, Al Maha Ceramics Co , Takaful Oman and Oman Arab Bank.
Salalah Power and Water Company, which owns and operates Salalah's $1 billion independent water and power project (IWPP), is planning to float an IPO this year.
Al Batinah Power Company and Al Suwaidi Power Company are also expected to run their IPOs this year or early 2014, floating 35 per cent of their shares, as per Authority for Electricity Regulation (AER) conditions.
The shareholders of Al Maha Ceramics Co are planning to divest 40 per cent of their holding in the company in favour of investing public through an IPO this year. Oman Arab Bank's IPO is also expected to hit the market this year.
Oman was always among the region's strong IPO markets. The pace in its IPO market looks set to pick up again this year.
The Gulf Co-operation Council (GCC) region experienced a slow start to the year with two IPOs in first quarter of 2013, a pattern similar to the previous quarter which saw the same number of listings. Although IPO volumes remained flat, total offering value increased more than three times to $377 million in first quarter 2013 compared to total proceeds of $78 million raised in the same period last year. In comparison with fourth quarter 2012, total offering value increased by 35 per cent from $250 million.
Companies in the MENA region raised around $2 billion through 14 IPOs in 2012, up 134 per cent from $843.9 million in 2011, according to a report by Ernst & Young. Saudi Arabia led the country standings in 2012, raising $1.4 billion through seven IPOs, followed by the UAE with $277 million and Oman with $264.4 million. Morocco and Tunisia were the only other MENA countries with IPO activity in 2012, said the report.
Suresh Kumar says short-selling, if allowed in the Muscat Securities Market, would bring along a number of benefits like increased investor participation and market turnover. It would also lead to better price discovery and higher revenues for financial intermediaries.
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