Oman’s capital market has experienced a dramatic increase in international investor interest, growing from 67 nationalities in 2023 to 135 this year. This surge is driven by investor-friendly policies such as low tax rates and flexible capital transfer options.
Recent statistics from the Muscat Stock Exchange (MSX) reveal a 19 % rise in foreign investments as of May. Investors from the GCC, Arab nations, and beyond are participating, showcasing a diverse investor base. Key policies, including unrestricted profit repatriation and flexible exchange operations, have significantly contributed to this growth. These trends reflect Oman’s economic resurgence and increased confidence in government strategies aimed at reducing public debt, enhancing investment in essential services, and launching infrastructure projects to encourage private sector participation.
Foreign investments are concentrated in the industrial (15.8 %) and service (15.7%) sectors. Gulf investors dominate the services sector (15.4%) and the financial industry (8.5 %). Conversely, non-Gulf Arab investments are primarily directed toward the financial sector, comprising 3%. Local investments show a strong preference for the financial industry (87.6 %), followed by the industrial (75.6 %) and services (67.7 %) sectors.
The first half of the year has seen substantial growth in trading activity at MSX, indicating increased market dynamism. Trading volumes reached 3.1 billion securities, valued at over 517 million Omani rials ($1.3 billion) by the end of May, marking a significant 38.4 % increase from the previous year. The rise in executed transactions further highlights heightened market participation and liquidity.
Foreign investors can invest in shares of MSX-listed companies or investment funds without prior permission, under the supervision of an independent body ensuring market fairness, investor protection, and transparency. Foreign investment in MSX-listed public joint-stock companies is allowed up to 100 percent, with significant interest observed in the industrial and services sectors.
Reflecting positive sentiment, the market capitalization of MSX-listed public joint-stock companies reached 9.4 billion rials by the end of May, an increase of 448.5 million rials since the beginning of the year. The overall market value of all MSX-listed securities rose to 24.48 billion rials, a gain of 676 million rials year-over-year, driven by contributions from closed companies and the bond and sukuk market. The main market index climbed to 4845 points by May’s close, up 331 points from the previous period.
Successful IPOs by companies such as Abraaj Energy Services and OQ Gas Networks have attracted new investors and increased market liquidity, with OQ planning IPOs for two more subsidiaries this year, according to Bloomberg. This upward trend underscores investor confidence in MSX’s growth potential, supported by the Oman Investment Authority’s (OIA) plans to offer additional companies for public subscription in the coming years.
The OIA reported a 7.4 % year-on-year increase in Oman’s sovereign wealth fund assets, reaching 19.24 billion rials in 2023, with a 9.95 % return on investment. This performance highlights the authority’s pivotal role in fostering economic growth and stability in Oman. The robust results also reflect the OIA’s strategic investment approach and effective management of its diverse portfolio, in line with its mandate to manage national funds and assets, build financial reserves, and advance targeted economic sectors through government policies.
Looking ahead, MSX aims to strengthen its regulatory framework, expand investor outreach initiatives, and cultivate an environment conducive to sustainable economic growth. By enhancing its reputation as a gateway for international investment and adhering to global best practices in financial markets, MSX aims to maintain its position as a leading choice for investors interested in opportunities in Oman’s dynamic capital market
