Omani bourse begins steps to secure Emerging Market tag from FTSE, MSCI

Oman’s restructured and rebranded bourse, Muscat Stock Exchange (MSX), has commenced efforts to secure a much-coveted elevation into the ranks of ‘Emerging Market’ stock exchanges.

Haitham bin Salem al Salmi (pictured), CEO of Muscat Stock Exchange, who is also Chairman of Muscat Clearing & Depository, said the ‘upgrade’ is a key component of a five-year strategy mapped out by the Omani bourse as part of its goal to go partially private in five years via a listing on the MSX.

“We are focusing on the reclassification of the market, where we enter the global indices, like FTSE, MSCI, and others,” Al Salmi said. “That will require us to have minimum liquidity, minimum market cap and a lot of technical requirements that will push us forward one grade from the Frontier Market grade where we are now.”

Speaking at the MSX Investors Roadshow held in Muscat last year, he noted that MSX is pitching for an ‘Emerging Market’ label’ – a ‘promotion’ that will place the Omani bourse – now wholly owned by Oman Investment Authority (OIA) — on the radar of global investment communities.

Based on a strategy map chalked out by the MSX, the Sultanate of Oman’s sole stock exchange continues to tick the boxes in its efforts to secure an ‘Emerging Market’ classification, starting with the FTSE index, according to the official.

“I’m delighted to mention that all of the technical requirements for the promotion have been completed – 100 per cent. Thus out of a total of 22 requirements, we need to satisfy nine. We have already satisfied 12 requirements of the FTSE target at this stage. What we need is now is to focus on liquidity and market cap.”

MSX’s strategy map for securing an Emerging Market label places significant emphasis on improving liquidity. “I believe that liquidity is the most critical issue in our market. And to enhance liquidity, we have the support of our stakeholders, our shareholders and OIA in particular, as well as our regulators. We aim to bring in more instruments in the market, initiate more activity in the market through news, through disclosures, and through better performing companies.”

Per the strategy map, MSX envisions a place on the watch-list of the targeted global indices, FTSE and MSCI, for at least a year before an upgrade is anticipated, said the official. “So the plan here is to be on the watch-list by 2023; we have to stay there for one year on the watch list. Then we will be upgraded,” he noted, while stressing in this regard the need for regular meetings, particularly with brokers, to help advance this objective.

The CEO also reaffirmed the bourse’s commitment to transforming into a commercially driven and sustainable entity that would serve as an engine of growth for the national economy, as well as generate value for its shareholders. The upshot of this effort, he said, is to ensure a successful listing of MSX on the Omani stock market within five years.