MSX declines 1.88% amid global economic headwinds and mixed sector performance
Muscat: The Omani stock market suffered a sharp downturn this week by 1.88%, reversing last week's positive performance, and bringing values back to levels not seen since late last year, according to an industry expert.
'The decline eliminated all the positive gains built up earlier this year following the fourth-quarter results. It was influenced by various external factors affecting regional markets, particularly the ongoing trade war led by US President Donald Trump,' said Ahmed Negm, Head of Market Research MENA at XS.com.
'His decisions on additional tariffs have created further uncertainty regarding economic stability and trade relations. Additionally, geopolitical developments in the region have potentially impacted investor sentiment,' he further added.
Oil prices demonstrated significant volatility this week, failing to recover despite several attempts, which further weighed on the market. Another significant factor was the US inflation data, which showed an unexpected jump, increasing the likelihood that interest rates could stay high for longer. The outlook was reinforced by Federal Reserve Chairman Jerome Powell's speech this week, where he emphasised that the Fed remains data-dependent and will continue monitoring inflation and labour market data before deciding on potential rate cuts this year.
Markets are currently pricing in one rate cut by the Fed this year, fewer than previously anticipated. Additionally, market performance was affected by corporate board meetings and their subsequent dividend distribution announcements.
Performances on the sector level were mixed this week. The Services sector demonstrated a negative performance this week, declining by 1.60%. Within this sector, several key companies faced downward pressure: OQ Gas Networks experienced a decline of 2.27%, followed by Oman Telecom which fell by 1.89%, while OQ Exploration and Production decreased by 1.58%.
The Financial sector also posted negative returns, dropping by 1.13% for the week. Among the major banking institutions, Sohar International Bank recorded the largest decline of 3.60%, while Bank Nizwa fell by 1.92%. Muscat Bank declined by 0.78%.
In contrast to other sectors, the Industrial sector emerged as a bright spot, advancing by 3.16%. The standout performer was Jazeera Steel Products, which surged by 20.63% following its dividend announcement of 43 Baiza per share. Other notable gains within the sector included Voltamp Energy, which rose by 8.61%, and Oman Cement, which appreciated by 2.53%.
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