MSX continues to maintain stronger profile than its GCC counterparts

Muscat: Oman’s benchmark Muscat Securities Exchange (MSX) continued to maintain a stronger profile than its regional counterparts, according to an industry expert.

“Thanks to the exchange’s exposure to both oil and natural gas markets as well as the strong profits published by local companies, MSX index has performed with gains,” Wael Makarem, Senior Market Strategist – Mena at Exness, said in an exclusive interview with Times of Oman.

“Apart from the Abu Dhabi stock market, the Muscat Securities Exchange was the only stock market in the Gulf Cooperation Council (GCC) region to remain near this year’s peak,” he further added.

The benchmark MSX index ended the week on September 15, at 4,478.67, while the MSX Sharia Index on the other hand ended the week’s trading session at 485.43. The total turnover of the MSX index at the end of the week on September 15 was OMR9.64 billion while the total market capitalisation reached OMR23.21 billion.    

When asked about the short-term and long-term risks that financial markets in Oman and other neighbouring GCC countries face, Wael Makarem said,” Among the main risks threatening the Omani stock markets as well as others in the region is the volatility in energy prices.”

“Crude oil prices could drop as demand could decrease further while the global economy continues to slow down and investors brace themselves to recession as interest rates continue to rise. The same applies to natural gas prices which are strongly affected by the geopolitical tensions in Europe,” he further added.

Elaborating on the expectations in the coming months about MSX and its counterparts Wael Makarem said that the MSX was supported this year by the strong results published by its listed companies and in particular banks. The market also found support from the rising oil and gas prices during the first half of the year before being pushed higher by good second-quarter earnings.

“Over the short term, the market could remain under pressure due to declining crude prices overall. However, over a longer time span, it could be boosted again if earnings in the third quarter are as good as the previous ones,” he further added.

Elaborating on the reasons behind the overall decline in international stock markets he said that several major events took place which hit investors’ risk appetite.

“However, the more persistent reason is the monetary policy tightening and the central banks altering their interest rates, to curb the soaring inflation. Chances of having a recession are rising by the day, as interest rates move higher,” he added.

“Thus investors are favouring to flee risky assets, and this could continue unless we have a clear vision that inflation is easing and central banks are willing to hold,” he concluded.