Delicate balancing act for Oman & Emirates

What's Down: Oman & Emirates Investment Holding has a sizable exposure to Omani equities which have slumped 20 per cent in the first half, according to Gulf Baader Capital Markets in Muscat.

Oman & Emirates Investment Holding's exposure to local equities will weigh on its stock performance, Gulf Baader Capital Markets said yesterday.

The Muscat investment firm has 18 million Omani rials, accounting for 30 per cent of its total asset base, in GCC equities, of which 15m rials is in Oman-listed equities.

Oman's benchmark has dropped 20 per cent in the first half of the year.

"We are neutral on Oman & Emirates Investment Holding, as present market conditions are not favourable for the company," said Kanaga Sundar, the head of research at Gulf Baader. "The stock is directly linked to the performance of Omani equities."

The company has sold its stake in an Abu Dhabi brokerage and a property firm, as it seeks to divest from nonperforming assets after reporting losses in the second quarter.

The company sold its 50 per cent equity stake in CI Capital brokerage, a brokerage subsidiary company of the Egyptian investment bank "for a sale consideration of Dh150,000 million net of its share of assets and liabilities on the date of transfer", according to a statement on the Abu Dhabi bourse website. Net loss surged during the six months to June 30, mainly because of losses arising from its subsidiaries and associates, and negative stock market performance in Oman and the UAE this year. The company's net loss increased to 1.67m Omani rials, compared with 293,476 rials in the same period last year.

The UAE stock markets have suffered low liquidity as traded value declined.

There are currently 64 brokerages operating in the UAE, down from 110 in the same period last year.

Oman & Emirates has also divested its equity stake of 2.1 per cent in Al Barari Firm Management, a property venture engaged in the construction and development of luxury villas in Dubai, "at a sale consideration of Dh25 million".

The company's shares, listed on the Abu Dhabi Securities Exchange, last traded on July 14, down 9 per cent to 70 fils a share.