Feeling the financial crunch due to the fall in oil prices, Oman’s stock market plummeted this week, suffering its worst start in years, with investors seeing an estimated RO675m wiped off total shares in just 11 days of trading.
Early this week (Sunday) was perhaps the worst of the New Year, as share prices on the Muscat Securities Market (MSM) hit a seven-year low, knocking off around RO250 million in share values in just one day.
The MSM index fell by 3.21 per cent to close below the 5,000 mark at 4,948.44 points amid global crude prices touching a 12-year low, which engendered fears of further economic decline. This is the biggest loss on the local bourse on a single day in the past year, after a 4.2 per cent plunge on December 11, 2014.
Other regional markets have also fallen steeply this year, with Doha stocks tumbling 18 per cent and Dubai’s main index dropping down by 15 per cent in value. Saudi Arabia was also hit badly.
Meanwhile, the Sultanate has borrowed money to meet the state budget deficit, according to a report from the Oman News Agency (ONA). The Ministry of Finance announced that it has signed a $1 billion loan facility agreement with 11 international banks, including two regional banks to finance the requirements of the state budget.
The Minister of Oil and Gas, Mohammad bin Hamad al Rumhy, also said this week that Oman would be prepared to cut its oil output by up to 10 per cent, as the price of oil dropped again amid fears that Iran will flood the market with oil following the lifting of international sanctions over the weekend.
A senior member of the Oman Chamber of Commerce and Industry (OCCI) has said there was no reason for companies to increase of their products due to the recent rise in fuel prices.
“The Omani rial is quite strong presently, making it cheaper for companies to buy products from the global market. The 14 baisa rise in the diesel price can be compensated since the Omani rial has been going up in the recent months,” said Ahmed al Hooti, a member of the OCCI.
The Public Authority for Consumer Protection also stressed that any attempt to increase prices of any market products without obtaining approval from the concerned authorities will prompt legal action.