MUSCAT, 16 June 2005 — As the Muscat Securities Market general index skyrocketed to record 5,284.87 points yesterday with a whopping increase in trade volume, the stock exchange’s watchdog warned investors to abide by the rules and regulations governing the Omantel initial public offering (IPO), the largest public sell-off in the Gulf state, to avoid punitive action.
“Don’t act on behalf those who are not allowed to take part in Oman’s unique issue,” Yahya ibn Said Al-Jabri, executive president of Capital Market Authority told Arab News — a reference to the rule that the trading in stock is restricted to Omani nationals and institutions for the first three months before foreign investment is allowed.” CMA is keeping a close watch on the $750 million IPO to detect any wrongdoing and punish the defaulters accordingly”.
He said the Omantel IPO has been designed by the government to benefit as many as Omani citizens as possible.” Any misuse of the facility will invite legal penalties.”
He said all possible measures are being taken to ensure that the Omantel IPO, which is expected to be hugely oversubscribed, “delivers the goods as desired. No manipulation will be allowed whatsoever.”
CMA was created in 1998 to stem the stock exchange crash in the wake of what turned out to be artificial boom, with some women selling even their jewelry to buy shares.” We want subscribers to play this mercurial game prudently and cautiously.”
A market analyst told Arab News that foreign investors, those from the fellow GCC countries in particular, and some resourceful expatriates in Oman, are” using Omanis as a vehicle to grind their own ax” to benefit from the soaring IPO. A senior banker, who thinks the IPO has caused “untold commotion” in the capital market, called it “a cross-border deal”, with investors from richer GCC states like the UAE and Kuwait “yearing to capitalize on the lucrative Omantel IPO.”
The MSM general index, which reached all-time high of 5,170.4 points in its 16-year history last week, surged to 5,284.87 points yesterday for an overnight increase of 1.14 points from 5,255.35, with trade volume jumping to 8, 492.68 million rials ($21 million) from overnight 5,507 rials ($14 million).