FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
MUSCAT SECURITIES MARKET
Muscat Securities Market has, during
the year 2011, implemented a number of
projects in various aspects related to the
development of the market.
Ahmed Saleh Al-Marhoon
Director General
We are all aware of the negative impacts of
the global economic crisis and the Arab spring
events on the performance of Arab and Gulf
financial markets. This is evident from the
continued degradation of investors’ confidence
in these markets and the resulting decline of
trading volumes and price indices. Financial
market data show that the average fall in global
capital markets reached around 11.6%, while
Arab and Gulf capital markets declined by
around 18% and 11.8% respectively.
The performance of Muscat Securities Market
has been, to a large extent, influenced by
all these circumstances. Trading volumes
continued to fall for the second year running
to reach around US$ 2.5 billion in 2011
compared to US$ 3.4 billion at the end of 2010,
thus posting a decline of 22.9%. Meanwhile,
the number of traded shares fell by 21.2%
to reach 6.2 billion in 2011 compared to 7.9
billion in 2010. Muscat Securities Market Index,
better known as MSM-30 plunged by 15.7% to
close at 5695 points compared to 6754 points
in 2010. The same trend applied to market
capitalization of the listed securities, which
declined by 5.1% to reach US$ 26.8 billion by
the end of 2011 compared to US$ 28.3 billion
in 2010.
MSM DEVELOPMENT
Muscat Securities Market has implemented a
number of projects related to the development
of the market.
In the area of information security and
protection, MSM applies the best international
practices in information technology, especially
those related to customer information
security. In this respect the MSM has obtained
the international ISO 27001 in the area of
information security.
The MSM launched, during the current month,
the latest NYSE Technologies version V.90 of the
trading system and other related systems.
All brokerage companies are now connected
with the trading system via modern and
advanced network using state-of-the-art MPLS
technology (Multiprotocol Label Switching).
Regarding MSM Index, the market has
introduced a change in the sectors forming
the price index. The Banking and Investment
Companies Sector was renamed to the
Financial Sector. Services and Insurance Sector
became the Services Sector and the Industry
Sector remained unchanged. This
Muscat Securities Market has, during the year
2011, implemented a number of projects in
various aspects related to the development of
the market.
Margin Trade Regulation has been approved by
CMA in 15 January 2012 after halt since 1998.
Hence brokerage firms can now provide this
service to their clients.
In the field of information security the MSM has
been awarded ISO 27001 certification by the
British Standard Institute (BSI) in recognition of
MSM information security management system
(ISMS) covering it’s Networking and security
solution.
On training, Muscat Securities Market has
signed a cooperation agreement with Bombay
Stock Exchange Training Institute to deliver
training programs in the securities and capital
markets fields in the Sultanate. Both MSM
and BSE have organized, in Muscat, training
programs on analyzing the dynamics of stock
markets.
The MSM introduced, in its website, an
advanced system for prompt analysis of
listed companies` data. The analyses will
be published on MSM website to enable,
brokerage companies, investors and other
interested parties, base their investment
decisions on solid grounds.
The MSM launched, during the current month,
the latest NYSE Technologies version V.90 of
the trading system and other related systems.
Furthermore, brokerage companies have
been connected with the trading system via
modern and advanced network using state-
of-the-art MPLS technology (Multiprotocol
Label Switching). This new technology
increases the level of information security and
secrecy through Virtual Private Network (VPN)
technology. It is worth mentioning that Muscat Securities
Market has made extensive contacts with the
World Federation of Exchanges (WFE) in order
to upgrade the level of MSM membership from
an affiliate to a full member. The market has
already submitted all the necessary documents
and information to the Federation.
new amendments resulted in a reclassification
of some companies in the new sectors based
on their main activity. Moreover, the number
of companies forming MSM sectoral indices
increased to 15 instead of 10 companies. programme on basic and financial analysis of
joint stock companies` statement.
The Market continued to implement several
media and awareness programmes in the
Sultanate and abroad. The MSM in cooperation
with the Ministry of Education organized
workshops for applied mathematics teachers all
over the Sultanate.
On training, Muscat Securities Market has
signed a cooperation agreement with Bombay
Stock Exchange Training Institute to deliver
training programmes in the securities and
capital markets fields in the Sultanate.
Regarding information dissemination, Muscat
Securities Market has signed an agreement
with an international company to develop and
update MSM website in form and content
in order to keep pace with the international
technical developments in the field of
information.
MSM has managed, through newly introduced
program in its website, to provide software
for the financial performance of the listed
companies. It is an advanced electronic
Secured Financing Account Directives, with
serious restrictions, have been issued last year
allowing margin trading operations at our stock
exchange.
FUTURE OUTLOOK
• Activating the Primary Market for new issues.
• Diversification of our investment tools.
The MSM is now in the process of listing
Exchange Traded Funds (ETFs) and Islamic
instruments.
• 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.
• Introducing market makers.
For achieving these goals the MSM is
dedicating more effort to improve its legal
environment working mechanisms, disclosure,
transparency, listing, and keeping up to date
with the latest international developments.
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