Oman’s Muscat bourse has reconstituted its general index — the MSM 30 Index — by replacing less active stocks with actively traded shares.

The MSM 30, the barometer of the market movement, is calculated after taking into account fluctuations in the share values of 30 companies selected from three different sectors — financial, services and industrial. The newly constituted index will be effective from July 3, 2017. 

The reconstitution of the general index was part of an annual exercise to give prominence to the most actively traded stocks, while calculating the index.

The selection is based upon three criteria — liquidity (45 per cent weightage), market capitalisation (40 per cent weightage) and earnings per share (15 per cent weightage). The market liquidity of a stock is determined after taking into account the total number of shares traded in a year, the turnover and the number of days the share was traded per annum.

According to a research note from Gulf Baader Capital Market, the probable new entrants in the newly constituted index will be Oman Fisheries, Al Jazeera Steel, Al Madina Takaful, Al Batinah Investment, Al Madina Investment, Al Jazeera Services and Oman Flour Mills.

Also, the expected deletions could include Al Suwadi Power, Al Batinah Power, Renaissance Services, Al Maha Ceramics, Al Maha Petroleum, Al Anwar Ceramics and SembCorp Salalah.

In the new MSM30 index, large and mid-cap companies, such as Bank Muscat, Oman Telecommunications Company (Omantel), BankDhofar, Bank Sohar, Ooredoo, Bank Nizwa and Oman International Development and Investment Company (Ominvest), will receive higher weightage.

Meanwhile, market liquidity and turnover are showing a declining trend due to listless trading, as the bourse is heading for the holiday season. The daily market turnover is hovering around OMR2-3 million, less than the average turnover witnessed last year.

Speculative investors and foreign institutions are currently not showing much interest in the market, while companies have not tapped the capital market for funds for some time.

Source: Timesofoman