Muscat Stock Exchange plans to launch market maker as it eyes emerging market status

Oman's bourse expects to see up to three IPOs in the second half of this year, its chief executive says

Muscat Stock Exchange. Courtesy Investcorp
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The Muscat Stock Exchange (MSX) plans to launch a market maker as it seeks to implement processes that will support raising its classification to emerging market status on global indices.

A market maker can be an individual or member firm of an exchange that buys and sells securities for its own account. Market makers boost liquidity and add depth to markets.

The index has now completed the procedures to lift all limits on foreign ownership in listed companies, MSX chief executive Haitham Al Salmi, told Al Arabiya.

This marks the "first step towards liberalising the market, as we mainly aim to raise its classification to an emerging market, which requires making shares available for trading by all nationalities", he said.

MSX also plans to soon launch a market maker fund and a liquidity fund in co-ordination with the concerned authorities, Mr Al Salmi said, adding that short-selling will also be allowed.

Dubai set up xCube, a company that will organise and promote the activities of market maker companies in the Dubai Financial Market and help the bourse attract more capital. The DFM introduced a Dh2 billion ($544 million) market maker fund to encourage listings and enable secondary trading.

GCC markets had a strong start to the year, with all the regional bourses in green during the first quarter, Kamco Invest said in a report this week.

The MSX index recorded the smallest monthly gain in the GCC during March, with the benchmark rising about 4 per cent to 4,205.2 points. The index has remained relatively unchanged since the start of this year.

The benchmark reached the highest level since December 2018 during the first week of March, “but mostly trended downwards for the rest of the month”, the report said.

The rise last month “more than offset the declines during the first two months of the year” with a first-quarter gain of about 2 per cent, the smallest in the GCC.

Oman is looking to boost liquidity in the market and plans to list 35 state-owned companies over the next five years, Mr Al Salmi previously said.

The exchange will have up to three initial public offerings in the second half of 2022, he told Al Arabiya.

It aims to meet all the requirements needed to join the FTSE Russell Emerging Markets Index by 2023, he said.

"We are conducting the main talks now with FTSE Russell, and we have completed the technical requirements in terms of internal procedures, but the major challenges are in the market value, liquidity and stock trading," Mr Al Salmi said.

"Our focus in the coming period will be on raising liquidity, and the first step was to raise the percentage of foreign ownership ... and then enhance liquidity through other strategies."

Updated: April 05, 2022, 1:21 PM