MSX closes lower, weighed down by most indices

MUSCAT: The MSX30 Index ended the week lower by 0.31 per cent. All sub-indices ended lower except industrial index. Services & financial Index closed higher by 1.19 per cent and 0.32 per cent, respectively. Industrial index closed up by 0.10 per cent. while MSX Shariah Index closed lower by 0.16 per cent.

Ats its EGM last week, Ominvest announced the following: To consider and approve the proposed issuance of RO 52m subordinated perpetual Mudaraba trust certificates (the Proposed Issuance) to Jabreen International Development Company SAOC (Jabreen), a fully owned subsidiary of the Company and a related-party, through Private Placement, as per the terms set; and to consider and approve the reduction of the issued share capital of the Company from RO 80.77m to RO 66.83 million by fully cancelling the treasury shares that the Company shall receive as part of the exchange transaction with Jabreen after completing the Proposed Issuance to Jabreen.

In its latest Financial Stability Report, the Central Bank of Oman (CBO) said that Conventional and Islamic banks in the Sultanate of Oman are adequately-provisioned to tackle risks stemming from non-performing loans (NPLs) — a concern exacerbated by the economic downturn and the pandemic.

At the end of 2020, the stock of gross NPLs (Stage 3 loans since the implementation of IFRS 9 in 2018) amounted to RO 1.111 billion (2019: RO 890 million) or 4.2 per cent (2019: 3.5 per cent) of the banks’ gross loans. The asset quality of the Islamic banking financing portfolio also remained strong with a non-performance financing (NPF) ratio of 1.9 per cent at the end of December 2020, which is among the lowest in the region, it pointed out.

Net NPLs of the banking sector amounted to RO 406 million or 1.6 per cent of the net loans at the end of 2020.

“This reflects that the existing loan portfolio of banks is well covered against expected credit losses through adequate provisions with the coverage ratio (Stage 3 provisions to NPLs) of 63.4 per cent (102 per cent including Stage 1 & 2 provisions)’’, it stated.

The total restructured loans in 2020 rose to RO 1.144 billion (2019: RO 970 million; 2018 RO 564 million). Moreover, the restructured loans classified as performing loans were RO 919 million or 3.5 per cent of gross loans.

(Courtesy: U-Capital)