The MSX30 Index ended the week down by 0.48 per cent largely on weakness seen in the financial index which fell by 0.93 per cent The services index also fell by 0.08 per cent while the Industrial sector rose by 0.28 per cent. MSX Shariah Index closed higher by 0.11 per cent.
During the week, Bank Muscat announced the acquisition of an additional stake in SICO BSC. At end-2020, Bank Muscat had announced a 72.71 per cent stake sale in Muscat Capital Company (CJSC), based in Kingdom of Saudi Arabia (KSA) to SICO BSC (c), a Bahrain based investment bank and an acquisition of 9 per cent shareholding in SICO BSC by Bank Muscat.
Bank Muscat now announced that it has obtained necessary regulatory approvals to acquire a further 1.38 per cent shareholding in SICO BSC via a secondary market purchase. After this transaction, Bank Muscat’s shareholding in SICO BSC (c) will be 10.38 per cent. Net worth of SICO BSC (c) as at the end of June 30, 2021 was BHD 66,965,000, the bank said.
We believe that this additional investment by Bank Muscat in SICO BSC is likely on account of increasing its shareholding stake in the said bank, in order gain significance in the Board of Directors.
SICO is one of the best Investment Banks in the region. It is the number 1 broker on the Bahrain Bourse, ad through its subsidiary SICO Capital, is also expanding presence in Saudi Arabia. Further, SICO reported BD 2.8mln net profit in the first half of 2021, due to strong income growth across diversified business activities and a 66 per cent year-to-date increase in assets under management.
Bank Nizwa announced during the week that it has received regulatory approvals for rights issue of RO 75m. The Bank is offering about 789.5m shares at a price of RO 0.095 per share in order to raise RO 75m. Each shareholder will be offered 53 per cent of his/her shareholding in terms of rights to new share subscription.
The rights can be traded on the MSX between September 5 – 12, 2021, while rights subscription will open between September 7 – 16. The bank aims to improve its capital adequacy metrics, in order to continue on its growth path. The bank posted a 20 per cent YoY and 3 per cent QoQ growth in its Islamic Financing portfolio in 2Q21.
Further, Covid-related delinquencies have been weighing on the bank’s asset quality metrics (which are superior to the local peer group but have been weakening), amid requirements to build provision buffers.
Currently, the bank ranks 4th within its local peer group in terms of Core Equity Ratio Tier 1 CET1 Ratio as at the end of 1H21, while the minimum regulatory requirement, under the revised guidelines due to Covid, is 8.25 per cent, along with certain allowances for prudential buffer. Record Date of the rights issue will be August 29, 2021.
Sohar International has also floated rights issue in order to raise RO 55m, subscription to which is opening on August 22, 2021.
Oman’s Ministry of Energy and Minerals (MEM) and Indian Rare Earths Limited (IREL) signed a memorandum of understanding (MoU) to cement cooperation in the field of minerals. The MoU provides for the exchange of laws and regulations endorsed by the two countries in the exploitation of mineral resources and data about investment opportunities.
The MoU comes in pursuance of the MEM’s efforts to develop the minerals sector in a manner that responds to aspirations attached to this vital sector.
While Oman’s mining sector’s contribution to the GDP is minimal, we have seen some recovery in its growth rate in 202, despite the pandemic. Further, this sector is a key pillar in economic diversification as envisaged by Oman 2040 Vision.
Energy Development Oman (EDO) has successfully secured a $2.5 billion debt financing transaction, which attracted an overwhelming market response at very competitive rates. The funding will further support EDO in achieving its key objective of alleviating the Government’s Block 6 funding requirements. The Company is also mandated to create growth; enhance efficiencies and governance in Oman’s oil, gas, and new energies sector; and unlock value through diversification and value chain integration. The deal was oversubscribed by more than 100 per cent which is a testament to investors’ confidence in EDO and Oman’s economy.
[Courtesy: U-Capital]
