Muscat - Economists

affirmed that the Omani Stock Exchange's decision to allow 100% foreign ownership of companies will lead to passing the standards of international evaluation institutions related to opening investment and openness to foreign investors, and will contribute to providing an attractive environment for investment development.

The Muscat Stock Exchange had recently announced that it had completed the procedures for opening the market for foreign investment in the companies listed on the stock exchange, so that 100% ownership became available to investors of all nationalities, considering that the decision to cancel the limits of ownership rates for foreign investment will lead to openness to the foreign investor and attract liquidity from investors. internationals to the Sultanate of Oman.

The Director-General of the Omani Securities Association, Ayman bin Ahmed Al Shanfari, revealed that foreign investors’ trading rates have increased from an average of 1.5% in the market more than two weeks ago, to an average trading rate of nearly 4% for foreigners, which confirms the existence of an improvement in all indicators related to the market in terms of the number of Deals, value of trades and high prices of traded companies.

Al Shanfari continued, in an interview with Al Jazeera Net, that the Muscat Stock Exchange's announcement of canceling the limits of foreign investment ownership ratios for listed companies contributed to a state of optimism among dealers in the stock exchange, so trading rates increased and the average daily trading improved to exceed its value of 3 to 4 million Omani riyals (7.8 million to 10.4 million). Millions of dollars) per day, compared to a daily average of two million riyals more or less.

Al-Shanfari: The new decision helps open up international markets (Omani press)

border abolition

Al Shanfari adds that the decision to cancel the limits on foreign investment ownership coincides with Standard & Poor’s raising the Sultanate’s credit rating from “BB-” to “B+”, with a stable outlook for the first time since 2015.

The Director-General of the Omani Securities Association believes that allowing full foreign ownership is certainly a conducive factor in opening up to global markets, and is an element of attraction for foreign investors looking to invest in the Sultanate of Oman.

Al Shanfari added that the Foreign Investment Law issued by Royal Decree No. 50/2021 allowed the foreign investor to establish and own 100% of companies in general, and therefore public shareholding companies are not linked to any restrictions on foreign investment, unless it is specified in the articles of association or companies’ articles of incorporation. .

On the impact of the decision to allow full foreign ownership of companies on foreign investment, Al Shanfari said that this decision will pave the way for the stock exchange to pass the standards of international evaluation institutions related to ease of investment and openness to foreign investors, and will encourage more international investments to enter the Muscat Stock Exchange in the Sultanate of Oman due to the availability of an environment characterized by flexibility and attractive elements. that helps to invest.

The Director-General of the Omani Securities Association stated that allowing the full ownership of all types of investors to be opened is an unprecedented step in the history of the Omani stock market, and this gives an impression and an indication of the Muscat Stock Exchange's desire to open up to the rest of the other markets.

He pointed out that the Omani Stock Exchange possesses promising and attractive opportunities for investment due to its good returns for investors, especially as there is a determination in the Sultanate to open economic and financial prospects to be found on the international economic map, especially in the field of investment.

Abolishing the limits of ownership ratios for foreign investment will pave the way for the Stock Exchange to pass the standards of international evaluation institutions related to ease of investment and openness to foreign investors, and it will contribute effectively to the Stock Exchange’s attractiveness to international investors and direct them towards a smooth and flexible environment in which all the ingredients for the development of their investments.

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— Muscat Stock Exchange - Oman (@MSX_Oman) March 28, 2022

Other criteria

For his part, economic analyst Youssef Al-Balushi believes that the decision to allow foreign ownership is subject to other criteria such as the articles of association of each company, and this is an acquired right for any institution.

On the impact of the decision on investment in the Sultanate of Oman, Al Balushi said that the decision is a good step to attract foreign investors and foreign capital more freely in their investments without obligating them to invest with local companies.

Al Balushi believes that there are other decisions that will support this step and its positive impact on foreign investment in the Sultanate. Efforts must be combined to grant the owners of money freedom to take what they see fit within the limits stipulated by the legislation without greater interference in that.

Tariq Abdel Razek, Deputy Director General of United Securities, had confirmed that the Muscat Stock Exchange’s decision to allow 100% foreign ownership of companies depends on the type of ownership percentage and according to its approval in each company, explaining that if the company includes a specific ownership percentage in its articles of association, the matter requires Calling an extraordinary general assembly and obtaining approval to amend the articles of association to raise the percentage of ownership.

Abdul Razek stated that most Omani companies have removed this clause from the articles of association, and therefore the law will apply to a large number of companies, adding that this decision is strategic for the stock exchange and supports it in the future.