Potential Upswing for the Omani Stock Market I Times of Oman

Muscat grape: The Omani stock market showed some volatility but remained without clear direction this week, closing around its opening price, according to a market analyst.

Unlike other markets in the region that showed some positive performance overall, the benchmark Muscat Stock Exchange (MSX) remained within the larger downtrend that began when the market peaked in March, said Farah Mourad, Senior Market Analyst of XTB MENA. Times of Oman.

However, the market could gradually return to a more positive trend thanks to changing global conditions, particularly with regard to US central bank monetary policy alongside solid local fundamentals, she added.

The Federal Reserve announced another rate hike on Wednesday that could mark a turning point for US monetary policy, leading to a pause and eventual fall in interest rates later this year, Farah Mourad said.

Such a change could support US and Middle East stock markets as traders take more risks. The improving sentiment could allow global investors to return to equity markets such as those of Muscat, Dubai and others in the region, she added.

At the same time, some concerns could remain as the US economy is expected to enter a recession later this year that could impact the global economy, and as the banking sector periodically rebounds as US regional banks remain under pressure . Such fears may have an impact on the local banking industry to some extent as investors may remain cautious. Global investors could continue to show concerns about banks despite the strength of Omani banks, Farah Mourad said.

The banking sector in Oman is performing strongly and continues to see an increase in deposits, a factor that has been increasingly followed by investors since the failure of a number of US banks. The sector is also seeing growing lending volumes despite higher interest rates, which could help banks generate more profits. A strong performance in the banking sector could boost the rest of the stock market and push the main index higher.

In addition, banks could also benefit from their solid credit ratings, which should help allay investor concerns. Most Omani banks have upgraded their ratings to a positive outlook, she added.

However, the market may still be exposed to the volatility and uncertainty in the energy markets. Oil, in particular, fell sharply this week before recovering and could cause some volatility in the market. Despite the strong rebound, it remains at a relatively low level compared to last year’s peaks. The commodity is expected to face a volatile year, with China’s economic recovery weaker than expected and the US potentially heading for recession, Farah Mourad said.