12 January 2021
HE Sheikh Abdullah Salim Al Salmi, Executive President of the Capital Market Authority said the transformation of Muscat Securities Market into a closed joint stock company in the name of Muscat Stock Exchange Company SAOC is insight of the wise leadership of His Majesty Sultan Haitham bin Tariq, May Allah protect him, of the importance of improving the regulatory scene of the Omani Capital Market.
HE expressed his happiness for the issuance of Royal Decree No. 5/2021 adding that the important move in the history of the Omani capital market represents a breakthrough leading to new chapter in the methodological development adopted by the Sultanate in advancing the capital market and upgrading its institutions according to the requirements of the present stage beside being one of the key requirements of the international organizations that add independence, professionalism and objectivity in administering its operations. Al Salmi added that transforming the MSM into independent company owned by the Oman Investment Authority comes at a significant phase in the process of the renewed renaissance further to its importance in contributing to 2040 Oman Vision and such direction would achieve alignment that would enhance the ability to provide appropriate alternatives for financing needs that support comprehensive development programs and transformation toward the envisioned economic diversification.
As to the questions on the importance of transforming MSM to a company, HE said the move would grant Muscat Stock Exchange adequate flexibility to manage its affairs easily and swiftly in decision making beside adaptation with the local and global changes and innovation in providing and marketing financing products and services that attract investors to support the economic development. Furthermore, the performance of the stock exchange will be subject to wise management standards and regulatory systems and legislations that ensure good performance and enhance its capability in the face of regional and global competition as the separation enhances the role of the regulator for investor protection and consequentially enhances investor confidence and ability to market and attract more investments.
On the development of the capital market sector HE said the capital market captures a vital position in the modern economies and mirrors the financial and economic systems of the state as well as being a mover of the economic growth through employing local savings and surpluses in financing investment projects and initiatives presented by the private sector or coverage of financing needs of the government. The stock market affects the economic activity through enhancing the liquidity needed by investors and improve allocation of capital to enhance the prospects of economic growth.
Al Salmi added that the key rationale that led to the transformation of the MSM into closed joint stock company owned by the Oman Investment Authority is that the Royal Decree would place Oman in a competitive and attractive position in line with the developments in the global stock markets which provide commercial services in consideration for commission and compete in rendering the services and facilities to their customers in addition to benefiting from safe investment opportunities to attract the capital of local and foreign investors.
HE pointed out that the countries all over the world are competing in attracting capital to stimulate their national economies, thus, the stock market strives to furnish all the constituents and invest in everything that would enhance investors’ confidence in the market to qualify for competitiveness and intended attractiveness to attract retail and institutional investors.
Al Salmi explained that the issuance of Royal Decree No. 5/2021 transforming MSM into closed joint stock company and liberating it from the regulator i.e. CMA meets one of the key international requirements that would augment its independence sought by international organizations such as the International Organization of Securities Commission (IOSCO), International Monetary Fund (IMF) and the World Bank (WB). He added that the separation of the MSM and its independence is one of the key governance practices in the management structure of the capital market sector and enables the MSM to carry out its activities with high professionalism and objectivity.
HE added the rationale for transformation is that several studies and organizations recommended transformation of MSM into joint stock company in order to facilitate offering its shares to the public as one of the means for increasing the efficiency and investor confidence. The World Federation of Stock Exchanges has pointed out in its statistics that the global trend is to transform the global stock exchanges into companies as best practice for regulation of capital market and in view of the experience of the neighboring markets in Abu Dhabi, Dubai, Qatar, Bahrain, Saudi Arabia and Kuwait who are owned by the sovereign funds in these countries and some have transformed into public joint stock company after a public offering such as Dubai Stock Exchange.
