A record $2.5 billion haul from new share sales helped Oman leapfrog markets like the UK last year, but the sultanate faces an early test of investors’ appetite in 2025.
The Oman Investment Authority-backed Asyad Group’s plan to sell at least a 20% stake in its shipping unit comes against the backdrop of muted debuts for two initial public offerings, including Muscat’s largest ever deal. Asyad Shipping Co.’s IPO will also serve as an indication of the government’s ability to execute its divestment program, for which it has earmarked around 30 assets.
“Asyad’s success will be a much needed catalyst for many more IPOs in the sultanate,” said Nishit Lakhotia, head of research at SICO Bank. Recent Omani offerings disappointed investors looking to make quick gains from flipping shares post listing, he added.
OQ Exploration & Production SAOG’s shares have fallen 17% since their October listing, while OQ Base Industries SAOG’s stock is largely flat since its debut last month. Firms that went public in 2023 have also struggled — OQ Gas Networks SAOC is down 6% and Abraj Energy Services SAOG is trading nearly 4% lower.
The weak outlook for energy prices may have dented appetite for recent Omani IPOs, which were linked to the oil and chemicals sectors, according to Hasnain Malik, emerging and frontier markets strategist at Tellimer.
Since October, Oman’s benchmark MSX 30 Index has dropped 3%, while the MSCI GCC Countries Combined Index has gained nearly 4% and Brent crude futures have risen 7.5%.
Asyad Shipping provides marine transportation services for key exports, making the business “relatively safe and sticky,” according to Lakhotia. A generous dividend policy may also help lure investors, he said.
Oman is a few years behind regional peers Saudi Arabia and the United Arab Emirates in its divestment program and its push to develop its capital markets. The Muscat Stock Exchange is among the smallest bourses in the region, with a market capitalization of just over $31 billion, according to data compiled by Bloomberg.
In August, the country’s capital markets regulator approved measures to boost private-sector listings and secondary liquidity. “The reforms are all in place to act as a catalyst,” Lakhotia said.
The sultanate is also chasing an upgrade to emerging-market status. Currently, Oman and Bahrain are the only countries in the six-nation Gulf Cooperation Council not classified as emerging markets by MSCI Inc.
Oman has “some way to go” to meet the market capitalization requirements necessary for the upgrade, said James Swanston, an economist at Capital Economics Ltd. But an improving economic backdrop is starting to boost the country’s allure, he said.
Stretched valuations — blamed for a string of disappointing listings in the Middle East — could be a factor in Oman as well. Asyad Shipping is considering seeking a valuation of at least $1 billion in its IPO, Bloomberg News has reported.
Strong debuts from Nice One Beauty Digital Marketing Co. and Almoosa Health Co. in Saudi Arabia show there is plenty of appetite for private sector plays on the domestic economy in the Gulf, Tellimer’s Malik said. “This should not prevent Oman from executing more privatizations, just maybe not at as high valuations as it previously hoped for.”
