(MENAFN- Muscat Daily) Last week was restricted to a day's trading due to Eid al-Fitr holidays.
The benchmark MSM30 index posted an encouraging performance, gaining 0.54 per cent to close at 5,539.84 on strong support from all sectoral indices, especially the Financial sector with investment and holding companies shining through.
There was notable focus on speculative and small-cap stocks.Â
The Financial index continued its impressive performance and was again the top gainer among the sub-indices on a weekly basis, gaining 1.36 per cent to 6,386.43, supported by banks and investment and holding companies.
The Industrial index ended the week adding 0.5 per cent supported by Al Hassan Engineering, National Aluminium Products and Galfar Engineering & Contracting.
Malaysian company WCT Berhad announced, on the Malaysian stock market, that its joint-venture with Oman Roads Engineering Company LLC, received the approval of the Omani Tender Board for construction and completion of Batinah Expressway (Package 2) for a contract amount of RO123.3mn.
The project is expected to be completed in 36 months. The Services index ended the week with slight gains, edging up 0.16 per cent to close at 2,627.87, with support from telecom shares.
In the only trading day of the week, local individuals were quite active in the market, and registered a net buying of RO29,000.
Perhaps one of the most important recent developments was the Royal Directive issued by His Majesty Sultan Qaboos bin Said to the Council of Ministers to take the necessary measures to implement a national plan to absorb national job seekers by creating 56,000 jobs in the private and public sectors - 36,000 in the public sector and the rest 20,000 in the private sector - starting from September this year.
This is expected to impact many vital sectors of the country and lead to an increase in demand for products of companies, especially in the financial, construction and service sectors.
On the GCC front, Qatar Telecom, which owns a 52.5 per cent stake in Kuwait's National Mobile Telecommunications Co (Wataniya), offered to purchase the remaining shares in Wataniya for US$2.2bn, which impacted positively the company stocks and the Kuwaiti and Qatari markets.
Most Gulf bourses had two days of trading (except Oman and Saudi Arabia) and they were mixed and trading activity across the region (in general) continued to be weak on account of holidays. We believe trading activity will improve as investors (mainly funds and institutions) return to the market.
At the beginning of last week's trading, Dubai Financial Market saw profit-taking mainly by individual investors.
On the international front, minutes from the recent policy meeting of the US Federal Reserve indicated that the Fed is ready to take key steps to strengthen US economic recovery.
Suggestions of a further round of quantitative easing and bond buying will lead to the strengthening in oil prices and added downward pressure on the US dollar.Â
We expect the increment in oil prices to further bolster regional equity markets.
Recommendation
We maintain our earlier recommendation with respect to the necessity of careful scrutiny of corporate results and market updates by keeping a positive disposition, bearing in mind the strong operational performance shown by most of the local companies.Â
We maintain our view that the Financial sector followed by the Services sector and selective Industrial stocks continue to display attractive financial indicators and the ability to exhibit good results in the third and fourth quarters.
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