Oman’s stock market has staged a comeback in recent months, raising investor expectations for the Gulf state’s privatization program after a string of underwhelming debuts.
Muscat’s benchmark index has risen 16% from its April low, driven by factors including credit rating upgrades and reform measures. After struggling in their initial months as listed entities, OQ Base Industries SAOG has surged over 40% since April, while OQ Exploration & Production SAOG has gained nearly 20%.
The rebound marks a turnaround for the market. Oman’s initial public offering volumes outpaced London’s in 2024, but disappointing debuts went on to dampen sentiment for a while. In March, Bloomberg News reported that a power utility paused plans to go public, in a setback for the sultanate’s ambition to privatize 30 firms.
The recent recovery and positive IPO performance have given a “real boost to the privatization program and restored investor confidence,” said Rawad Kassouf, head of equity capital markets execution and syndicate at Arqaam Capital.
Junaid Ansari, director of investment strategy at Kamco Invest, said he expects the government to press ahead with more IPOs, though the pace will depend on valuations. “Investor concerns about liquidity are being addressed by paying generous dividends, resulting in yields of over 7%, one of the highest in the Gulf Cooperation Council,” he said.
Oman’s push to secure an upgrade from frontier to emerging-market status is also aiding the market rally. Of the six GCC states, only Oman and Bahrain remain outside MSCI Inc.’s emerging-market category.
“Achieving EM status would be transformational,” Kassouf said. It could bring an estimated $1 billion in active and passive inflows, boost liquidity and potentially trigger a re-rating of valuations in Oman.
To qualify, Kassouf expects an increase in free floats, new blue-chip listings and consolidation among mid-caps. OQ Exploration & Production’s plan to repurchase up to 3% of its listed shares may appear at odds with free-float expansion, but he said the reduction is modest and likely to be offset by share price gains.
Oman’s recent upgrade to investment grade by two international credit rating agencies in less than a year has also buoyed sentiment, said Ankit Garg, head of equity capital markets at state-owned Oman Investment Bank.
The upgrades come amid a series of constructive economic indicators, including positive data on non-oil growth and falling government debt, said Hasnain Malik, head of equity strategy research at Tellimer. “That potentially bodes well for the privatization agenda.”
Oman is also working to broaden its revenue base and reduce reliance on oil, and plans to become the first Gulf state to introduce an income tax in 2028.
Market reforms have added further momentum. The Muscat bourse has introduced liquidity-stabilization contracts and market-making services to improve efficiency. Omani companies have also stepped up investor outreach in recent months, attending more conferences, according to Kassouf.
“If the current momentum is sustained, investors will begin to see meaningful returns on recent IPOs which will help build confidence,” said Garg. “This will also create a pathway for the Sultanate of Oman to move forward with its privatization program.”
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