Crude declined to the lowest level since 2008 amid estimates that the OPEC's decision to scrap production limits will keep the market oversupplied. Brent futures capped the biggest weekly decline in more than a year.

The global surplus will persist at least until late 2016 as demand growth slows and the Organization of Petroleum Exporting Countries shows 'renewed determination' to maximise production the International Energy Agency said on Friday.

The group chose not to curb output at its December 4 meeting. Brent for January settlement declined US$1.80 or 4.5 per cent to US$37.93 a barrel on the London-based ICE Futures Europe exchange. It was the lowest close since December 24 2008. The contract decreased 12 per cent this week.

West Texas Intermediate for January delivery slipped US$1.14 or 3.1 per cent to close at US$35.62 a barrel on the New York Mercantile Exchange. The contract dropped 11 per cent this week the biggest weekly decline in a year.

Additionally the decision on US interest rates is looming (with a decision set for December 15 or 16) and this is expected to affect commodity prices which have already fallen since the beginning of the year the value of dollar denominated bank accounts as dollar strengthens further and the ability of highly leveraged corporates to raise additional debt. The MSM Shariah index posted a weekly decline of 1.58 per cent.

The Al Arabi Oman20 index lost 1.94 per cent with turnover amounting to RO11.08mn while the Al Arabi GCC50 index gave up 1.59 per cent. The Al Arabi MENA200 index fell 2.26 per cent to 956.78. The MSM announced its revised Shariah index based on third quarter financial results.

The revamped index will be affective December 12. Construction Materials Industries Oman Textile Holding and Sharqiya Investment Holding will give way to Gulf International Chemicals Oman Fiber Optic and Takaful Oman. All the market sub-indices declined on a weekly basis.

The Financial index dropped 1.85 per cent to 6571.64. The Industrial gauge fell 1.37 per cent while the Services index lost 0.89 per cent. In corporate news Oman Oil Marketing Co announced that it has been qualified to manage operate and maintain fuel filling stations and service centres in Saudi Arabia.

The company is currently in the process of preparing the feasibility study. The results of the study will be utilised in taking the right decision in terms of the investment in fuel retailing in Saudi Arabia. Selling pressure in the market was exacerbated by foreign institutional investors and local individuals who registered a net sale of RO3.72mn worth shares. On the other hand local and GCC institutional investors registered a combined net purchase worth RO3.95mn.

Last week tenders worth RO10.92mn were awarded. This takes the value of total awarded tenders on a year-todate basis to around RO721.7mn against RO 1333.7mn for the same period in the previous year as per announcements and our database.

Across the GCC trading turnover and volumes have nose-dived in 2015 to-date compared with levels seen in 2014. The decline in value is as follows: Abu Dhabi: -60%; Dubai: -60%; Qatar: -51%; Oman: -42%; Bahrain: -40%; Kuwait: -31%; and Saudi Arabia: -21%. Similarly volumes have declined over the said period as follows: Abu Dhabi: -52%; Bahrain -51%; Qatar: -47%; Dubai: -38%; Oman: -26%; Kuwait: -16%; and Saudi Arabia: -4%.

The Central Bank of Bahrain and the Central Bank of Oman have ruled out the possibility of de-pegging their currencies from the US dollar in spite of the exacerbation of the oil price crisis.

In another context the UAE Ministry of Finance and the GCC announced agreement on the main issues for the application of VAT in the region and pointed to the taxes imposed directly for the first time.

Recommendation We advise investors to not be drawn into the present panic being witnessed and to trust markets' ability to re-rate as evidenced by historical experience. We affirm our opinion that despite the decline in prices this is a rare opportunity to invest in some companies after careful consideration of available information excluding external influences that we believe have already been factored into prices more that they should be.

By special arrangement with Oman Arab Bank - Investment Management Group