Published: Sep 27, 2014
Source: Muscat Daily


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CMA seeks higher retail participation in markets

The Capital Market Authority (CMA) is looking to boost the number of active individual investors and grow the pool of retail investors in Oman’s capital market, which has traditionally been dominated by institutions.

CMA chief H E Abdullah al Salmi said on Thursday that a key focus of the market regulator going forward would be to make the capital market more attractive and accessible for individuals and small retail investors.

He was speaking at a press conference to release a special report on capital market and insurance activity in 2013.

The executive president said, “One of our key objectives is to distribute market benefits in the society and allow small investors to get a chance to participate with their savings and contribute to the economic growth of the country. It is part of our public awareness drive to expand the shareholding base in Oman. We are trying to get as many people as possible to participate and learn how to deal in capital market.”

H E Salmi said the regulator will continue to allocate major chunks of initial public offerings (IPOs) to retail investors in the coming years until it sees a reasonable balance between retail and institutional investor participation. “Even in the secondary market trading is dominated by institutions. So in order to strike a balance we need to attract more individuals and small investors to the market.”

As part of efforts to spur retail participation, CMA has, over the past few years, significantly increased the proportion of shares allocated to retail investors in IPOs. In the case of small-sized IPOs, such as Sharqiyah Desalination Co’s in 2013 and Al Maha Ceramics Co’s, which is currently open for subscription, institutions were not allowed to participate - a move that helps promote retail participation in the market.

According to the CMA report, the capital market has become the largest source of raising funds for Omani companies. Companies raised RO1.17bn in 2013 from the capital market, which is more than twice the amount of new credit and loans that companies raised from banks. Investors in listed companies gained RO1.93bn in 2013, an annual return of 24.8 per cent.

“We are on track to integrate the capital market with the national economy. There is still much to be done in terms of increasing representation of different sectors in the capital market. There are many sectors which play a significant role in economic development but are not really represented in the capital market,” H E Salmi added. 

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