MSM hits lowest point this year despite Government intervention

As predicted, despite the exhortations from the Government and the spending of Pension Funds, today the MSM hit a new record low for the year, closing at 8638.98 after falling all day. In just the past 3 months the market has fallen 28% from its record high of 12,164.54.

Will we now see the start of Phase 3 of the campaign to save face and calm the small investors?

Phase 1 was The Chairman of the Omani Chamber of Commerce Al Khonji in the press on August 17th saying all was OK, that the market was undervalued [index at ~10400], and people should take advice from their brokers (and buy).

Phase 2 was getting the Minister of Commerce HE Maqbool Bin Ali Bin Sultan to tell the Pension Fund managers to buy shares as the market plunge was not justified [index now at 8740], and (more tellingly), getting the press to inform the public that that’s what he had done before the market re-opened this week. And have the papers report the resulting ‘surge’ in the market (Good old times of Oman).

Phase 3 is now to make sure everyone knows its also happening elsewhere (but worse), and that its not the Government’s fault [index now at 8640]. Is this why we saw articles today about how the whole GCC is in the hole, that it’s the fault of the Global economy and foreigners? And this classic from the razor sharp Times of Oman News Desk, about how the Oman economy is not just booming, but (and I quote) "the reality is even bigger, better and sweeter"? (see below). Oh oh. If the Times is telling me how totally and utterly fantastic everything is for Omani Real Estate, things must be really bad.

[Readers please note, there is absolutely no connection what-so-ever between the observation that this article pumping investment in Oman real estate only happened to appear in the Times, and to the fact that the son of the paper's editor is Chairman of Blue City, a massive and hugely adventurous Real Estate speculation project thats reportedly in trouble meeting sales targets before even building phase 1. Editorial independence and hard hitting opinions are a cornerstone of The Times unquestioned editorial integrity.]

Actually, for some key stocks the market is now looking to be at a reasonable level. The last 3 months have seen some so-called Omani Bluechips dropping a long way:
Bank Muscat down 32%
National Bank of Oman down 41%
Galfar down 35%
Rennaisance down 19%

Of course they may get even cheaper over the next few weeks… But if there’s another 10% drop the market must be getting close to bottom. My pick would be Bank Muscat, if you’re willing to believe the oil price will stay high and there won’t be a credit crunch in Oman given the very high level of personal indebtedness… Hmmm.

Times of Oman (Editors Choice!): Hot property!

Times News Service
Tuesday, September 09, 2008 11:46:50 PM Oman Time
MUSCAT — While there is general talk of economic boom in Oman, the reality is even bigger, better and sweeter. Take the real estate sector for instance. With residential properties emerging as the highest income-yielding investment in the Sultanate, there are bound to be massive investments in real estate by both domestic as well as international investors.

According to a leading solution provider to real estate sector, the Omani real estate market is expected to continue its rapid growth well into the future, with analysts predicting that the value of demand will top RO8 billion by 2010.
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Oman Tribune 1

Gulf stocks face more turbulence
KUWAIT CITY Stock markets in Gulf states are increasingly jittery because of global economic uncertainty and shaky investor confidence and could face a roller-coaster ride ahead, economists said on Tuesday.

Five of the region’s seven stock markets are in the red, shedding more than $120 billion since the start of 2008 despite the listing of a large number of new companies. The seven – including two in the UAE – now have a combined capitalisation of $995 billion.

“Global and domestic factors are impacting the markets, making them fluctuate sharply and become unpredictable... A slide in oil prices in recent months has compounded the impact,” Saudi economist Abdulwahab Abu Dahesh said.

“Gulf investors are less optimistic about the future despite a huge oil windfall. They are uncertain about the extent to which the troubles of the global economy will affect domestic economies,” Abu Dahesh said.

After making a remarkable comeback in 2007 from a two-year correction, the Saudi and Dubai markets have been leading the way down this year. The two markets have so far lost 25 per cent each this year, followed by Abu Dhabi Securities Exchange which has shed 8.4 per cent while Bahrain and Oman have dropped 5.1 per cent and 2 per cent, respectively.
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Oman Tribune 2

Stocks fall; Russian market plunges 7.5%
LONDON European stock markets closed lower and Russia’s benchmark RTS share index plunged 7.5 per cent on Tuesday as US economic worries joined falling commodity prices and political concerns closer to home over Georgia in hammering stocks.

The RTS fell below 1,400 points for the first time since early 2006 to close at 1,395. The MICEX index shed 9.08 per cent at 1,158 points.

London’s FTSE 100 index down 0.56 per cent at 5,415.60 points. In Paris, the CAC 40 index lost 1.08 percent to 4,293.34 points and in Frankfurt the DAX shed 0.48 percent to 6,233.41 points.
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