Yes, Kuwait have also done it recently following huge investor protests, and other Asian countries did it in the aftermath of the Asian Crisis in 1998. You can read the sycophantic arguments supporting the Government's move in, where else?, the Times of Oman.
However the Oman Government will now be under pressure to buy all sorts of crap to support the portfolios of the well off or ill-informed investor. As long as the fund is properly controlled, and only buy on the basis of solid business performance, long term there is little downside. But if they get too involved, it will lead to market distortion - at what price will they buy, and even more important when will they sell? What will they do if the money runs out? 150 million is not a lot compared to the overall market capitalisation, but then again, a lot of the shares are already owned by the Government in one form or another via direct holdings [Omantel] and pension funds [more than 40% of Bank Muscat].
What do people think? Do you want to see the Government throwing money into the mouth of the local stock market right now?
Oman sets up fund to stabilise stock market
Oman’s government said on Thursday it would set up an OR150m ($389.6m) market-maker fund with the private sector to help stabilise the Gulf Arab country’s bourse as the financial crisis bites.
The government would provide 60 per cent of the fund, or OR90m, while the private sector and pension funds would contribute the remaining 40 per cent, it said in a statement on the bourse website.
”The fund will be managed by a special administration operating on market fundamentals to provide protection from the sharp and unjustified volatility that the financial markets are being exposed to and also work towards balancing supply and demand factors in the market,” the statement said.
”The government hopes the creation of this fund will return confidence in the investment climate,” it said.
The fund will be involved in both buying and selling shares on the Omani bourse in an effort to increase liquidity and smooth the volatility that has gripped Gulf Arab bourses over the past two months.
A trader said it was expected start operations in December.
Kuwait, which has been the worst hit of the Gulf countries in the financial crisis, has had its sovereign wealth fund buy up plummeting shares for weeks in a bid to shore up stocks and confidence.
On Tuesday, the government said it had asked its investment arm to set up a fund to invest in the bourse to shore up confidence after a brief halt to trading following weeks of declines.