(MENAFN - Muscat Daily) Market analysts have said that the general index of the Muscat Securities Market (MSM) seems to have bottomed out for this year and the local bourse is set for recovery in the fourth quarter taking cues from third quarter earnings season, which is around the corner.With the help of recently improved activity, MSM30, the general index of the Omani stock market, gained 29.1 points on Thursday to close at 5,646 points, the highest level in last three months.Providing mixed views on corporate earnings, analysts said that most of the listed companies are expected to post better results in the third quarter with some companies to sustain their second quarter performance.''The near term focus of the market will be on the third quarter results and expect the market to take a direction from the result cues. Improved institutional participation as compared to second quarter and increased interest by foreign investors has helped in trading activity improvement,'' said Joice Mathew, head of research at United Securities.According to United Securities' estimates, the third quarter corporate profitability of listed companies is expected to increase by 18 per cent year-on-year, supported by profitability growth in financial and industrial sector firms.''Banking profitability is expected to grow by 11 per cent in the third quarter year-on-year, but to remain at stable levels on a sequential basis. Industrial stocks are expected to recover from the cost increases that hit their bottom lines in the third quarter, and show better signs of improvement,'' added Mathew.Kannan Rajagopal, assistant general manager at Global Omani Investment Company, said that industrial and services sectors as well as investment holding companies are expected to perform better in the third quarter earnings.He said, ''People are waiting for the third quarter results. We are quite positive about better market performance in the fourth quarter. However, banking sector may not continue to post the same credit growth as they did in the first half of this year, mainly due to the new regulations of retail lending earlier this year.''Kanaga Sundar, senior analyst at Gulf Baader Capital Markets (GBCM), said that there is a need for fund flows to the market which have been missing earlier.He said, ''I do see the market has bottomed out. We are expecting more funds to flow to the market in the fourth quarter.''Sameer Kattiparambil, vice president of research at EFG-Hermes, said, ''Most companies are expected to announce better results for the third quarter, and we are not expecting any major negative sentiments to prevail in the fourth quarter.''
