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MENAFN - Muscat Daily - 06/10/2012

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(MENAFN - Muscat Daily) Despite fewer local triggers during last week, the MSM30 Index managed to finish at its highest weekly gain in more than three months closing at 5,646.36, surging 2.12 per cent, as local and foreign institutional buying in addition to positive expectations on corporate results supported the market.During last week, Al Arabi Oman 20 Index rose 1.96 per cent to finish at 1,023.3 as turnover amounted to RO16.08mn. Al Arabi GCC 50 Index increased by 0.9 per cent to close at 980.91. Also, Al Arabi MENA200 Index registered an increase of 0.39 per cent to close at 927.31 points.Unlike the previous week, all sub indices performed well on a weekly basis led by the Financial index?, which went up by 2.67 per cent to 6347.28 gaining support from most of the bank shares in addition to holding and investment companies.The Services sector gained 2.46 per cent last week and closed at level of 2,771.89 supported by Renaissance Services, SMN Power Holding and Port Services Corp.The Industrial Index increased by 2.32 per cent on weekly basis to the level of 7231.52 backed by Oman Cables Industry, Oman Refreshment and Al Anwar Ceramics Tiles. During the week, the AGM of Oman Flour Mills Co approved cash dividend of 25 per cent of the paid up capital to shareholders, which is 25bz per share for the year ended June 30. Minor trades were seen on the stock which ended the week unchanged at 490bz per share.As noted in the previous week, there was increasing activity on the stocks that normally register speculation activities. This shows the return of the speculators to the market to benefit from the investor movements on selected shares that might see changes according to the state of each company and sector.This does not necessarily mean that genuine opportunities do not exist in the market, rather investors are advised to be sure about their investments decisions and to focus more on the fundamentals and results as well as to avoid speculation.The above said does not offset the fact that there are real investment opportunities in the market which are offered by selected companies who have benefited and stand to benefit in the coming period from the healthy macroeconomic situation.Initial results which are going to be announced especially by the leasing sector followed by the banking sector are expected to show healthy performance and should reflect gains from financing offers made during the Holy month of Ramadan. It is worth noting that leasing companies P/BV, P/E, and Dividend Yield are 1x, 8.6x and 7.1 per cent respectivelyOn analyzing the MSM30 index performance for the month of September 2012, we observe the following:- Increasing interest on construction and infrastructure companies like Al Hassan Engineering and Galfar Engineering & Contracting on the back of the healthy additions to their order book during the month. Both of the shares were among top five in the gainers list;-  Strong presence of foreign institutional investors;- The highest monthly volume and value of the shares traded since April;- Main index second consecutive monthly increase. MSM30 index ended the month with an increase of 0.99 per cent on monthly basis and closed at 5,534.38.The Service index increased the most (3.93 per cent month-on-month) which can be attributed to the healthy performance of power companies like Sohar Power, Acwa Power in addition to other shares like Renaissance Services and Al Maha Petroleum Marketing Co. Industry Index came second with an increase of 3.67 per cent on monthly basis thanks to the commodities shares and construction shares.Trading statistics show that after excluding the special deals done on some stocks during the week prior to the last week, both of total volumes and traded value increased by 13.1 per cent and 7.3 per cent respectively to 100mn shares with value of RO 23.4mn. As mentioned earlier, the market witnessed notable presence of institutional investors with net buying of RO1.67mn In the weekly technical analysis, during the last week our recommendation was achieved as we mentioned in our last analysis to reach the level of 5,640, currently the index still in upward trend and therefore approaching the index and close above the first resistance level at 5,700 would allow to reach a level of 5,800. We expect to touch the 5,700 level during the coming period.In the GCC, adoption of FTSE benchmarks by Vanguard for its emerging market funds buoyed the markets in the UAE as the FTSE assigns a higher benchmark weight to the UAE than the MSCI which considered it as a frontier market.Further the Saudi Purchasing Managers Index recorded its highest reading in September at 60, the highest since January, registering its greatest gain of two whole points.  A government plan to spend more than US500 bn has sparked record sales of Islamic debt and the fastest expansion in bank loans to private businesses and consumers since 2009, according to BloombergRecommendationWe expect the market to attract more investors in the near term especially institutions bearing in mind the government spending indications  in 2013 wherein more direct investments are expected to be in sectors that are providing higher yields as well as better operating and financial opportunities.


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