(Bloomberg) — A record $2.5 billion haul from recent share sales helped Oman leapfrog markets just like the UK last 12 months, however the sultanate faces an early test of investors’ appetite in 2025.
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The Oman Investment Authority-backed Asyad Group’s plan to sell at the very least a 20% stake in its shipping unit comes against the backdrop of muted debuts for 2 initial public offerings, including Muscat’s largest ever deal. Asyad Shipping Co.’s IPO may even function a sign of the federal government’s ability to execute its divestment program, for which it has earmarked around 30 assets.
“Asyad’s success shall be a much needed catalyst for a lot of more IPOs within the sultanate,” said Nishit Lakhotia, head of research at SICO Bank. Recent Omani offerings disenchanted investors trying 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 basically 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 could have dented appetite for recent Omani IPOs, which were linked to the oil and chemicals sectors, in line with 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 secure and sticky,” in line with Lakhotia. A generous dividend policy may help lure investors, he said.
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Learning Curve
Oman is just 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 many smallest bourses within the region, with a market capitalization of just over $31 billion, in line with data compiled by Bloomberg.
In August, the country’s capital markets regulator approved measures to spice up private-sector listings and secondary liquidity. “The reforms are all in place to act as a catalyst,” Lakhotia said.