Oman: MSX lists new bonds and sukuks worth $941mln

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Muscat: Muscat Stock Exchange (MSX) listed new bonds and sukuk worth OMR362.4 million in the first half of this year, issued by the Central Bank of Oman (CBO), local banks and a number of public joint stock companies listed on the bourse.

Muscat Stock Exchange seeks to stimulate trading activity by diversifying the investment instruments listed therein, which contributes to encouraging corporate and individual investors to diversify their investment portfolios. The total number of bond issues listed on the stock exchange is 36, including 16 government development bond issues, while the total number of sukuk issues listed on the stock exchange is 13, including 6 sovereign sukuk issues.

Bonds are debt instruments used by governments or companies as a means of borrowing. The issuer of the bond undertakes to pay the holder a predetermined interest throughout the term of the bond and to return the nominal value of the bond upon maturity. Some companies convert bonds into shares to support their capital. Sukuk are financing instruments that comply with Islamic law and the owner of the sukuk receives a profit from the issuing entity. Listing bonds and sukuk on the stock exchange allows their holders to sell them before the maturity period and also allows other investors to buy them from the stock exchange and benefit from the profits paid by the issuing entity to the holders of bonds and sukuk.

The bonds and sukuk market witnessed the listing of 7 bond issues in the first half of this year; the most prominent of which was Issue No. 69 of Government Development Bonds with a value of OMR100 million, Issue No. 70 of Government Development Bonds with a volume of OMR125 million. Free bonds were also listed, mandatory conversion into ordinary shares after three years from the maturity date, issued by the Omani International Development and Investment Company (Ominvest) with a value of OMR13.3 million after the decision of the company’s annual ordinary general assembly to issue bonds to the company’s shareholders as non-cash dividends to be distributed to shareholders. The bonds were issued at a rate of one bond for every 5 ordinary shares owned by the shareholder.

In the banking sector, Ahli Bank issued free bonds that are mandatory convertible into shares worth OMR10.3 million and were listed on the Muscat Stock Exchange on May 6. In the finance sector, National Finance Company issued unsecured perpetual subordinated bonds worth OMR35 million, while Oman Financial Services Company (OIFC) issued free unsecured bonds that are redeemable after 5 years from the date of issuance and are not convertible into shares worth OMR1.5 million. In the insurance sector, Liva Group issued bonds that are mandatory convertible into ordinary shares after 3 years from the date of issuance and were listed on the Muscat Stock Exchange on June 5 with a value of OMR4.7 million.

During the first half of this year, Dhofar Insurance Company restructured its bonds after the General Assembly of Bondholders decided to convert part of the bonds into shares. According to the restructuring process, the size of the bonds was reduced from 20 million bonds to 10 million bonds with a nominal value of 100 baisas per bond. Accordingly, the Muscat Stock Exchange reduced the number of Dhofar Insurance Company bonds listed on the stock exchange as of June 2nd until their maturity date on June 30th, 2025.

In the Sukuk sector, the Muscat Stock Exchange listed in the first half of this year the “Tilal” Sukuk worth OMR55.9 million, and the third issue of the ‘Meethaq’ Sukuk worth OMR16.5 million.

The total market value of the bonds and sukuk market reached OMR4.35 billion by the end of June 2024, down by OMR76.1 million from its level at the end of last year. This decline came after the Muscat Stock Exchange cancelled the listing of bonds worth OMR120 million, including the perpetual bonds issued by Bank Sohar International in 2019, worth OMR100 million, and the perpetual bonds issued by Ahli Bank in 2019, worth OMR20 million. This cancellation came as a result of the two banks’ desire to redeem the aforementioned bonds.

The market value of the bonds and sukuk market represents about 18 percent of the total market value of securities listed on the Muscat Stock Exchange amounted to OMR24.28 billion by the end of June 2024.