FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
MUSCAT SECURITIES MARKET
Ahmed Saleh Al-Marhoon
Director General
We are continuously working on developing
and operating an efficient and transparent
securities market to the best standard
expected by our local and foreign investors.
We believe that exchanges that adhere to
good governance, greater transparency and
greater accountability, are able to foster
investors` confidence as well as creating
attractive investment environment.
HISTORY AND DEVELOPMENT
The MSM has passed through two stages; one
started when the exchange was first
established in 1989 and continued up to 1998.
The second stage lasts from 1998 till today.
Each stage has its own characteristics and
environment. One of the significant changes in
the market structure was the establishment of
three independent organizations the Capital
Market Authority (CMA) as a regulator the MSM
for listing and trading and the Muscat
Depository Company as a central depository.
The first era of MSM was a learning experience
for the people running the exchange and for
the market participants as well as the investors
and the public at large. In the beginning there
were 48 public shareholding companies listed
and six brokers; the market cap was around
RO 414.7 million (Rial 1= US$ 2.59781). The
ambition at that time was to grow the exchange
by listing more and more companies. The
government encouraged the establishment of
new public companies through various
incentives especially in the industrial sector.
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We believe that exchanges that adhere to
good governance, greater transparency and
greater accountability, are able to foster
investors` confidence as well as creating
attractive investment environment.
We at Muscat Securities Market (MSM),
however, have devised a comprehensive road
map that enables us to build capacity and
promote sustainable capital market
development strategy specifically aimed at
improving access to the regional and
international capital markets. In view of the above MSM recently revised its
legislation with respect to listing, trading and
clearance and settlement regulations to enable
MSM to cater for what our market demands.
This resulted in rapid growth in the exchange in
terms of the number of stocks listed reaching a
peak at the end of 1996 with 97 companies,
which was reflected in the increase of the
capitalization of the market where it reached
RO 1.62 billion during the same period. Market
cap was also overstated by the inflated indexes
where the main indexes reached 5,300 at the
first quarter of 1998. FUTURE OUTLOOK
After 1998 the market entered into a very
critical situation with the main index dropping,
market confidence and market sentiments were
very weak, and the corporate performance in
general was low due to difficulties which the
national economy was facing because of the
decrease in oil prices at that time.
The market authorities evaluated the first
period to identify what went wrong and started
building on the experience they have for a
more scientifically operating exchange of
today.
We are endeavoring to strengthen our
experience for a more scientifically built stock
market.
• Diversification of our investment tools.
The MSM is now in the process of listing
Exchange Traded Funds (ETFs)
• Activating the Primary Market for new issues.
• Improving our technological systems to cope
the development in the trading, clearance and
settlement operations.
• Transformation of family enterprises into
public joint stock companies.
• Increasing investment funds which are
specialized in dealing on securities.
• Attracting foreign investments.