MSM-listed firms lead earnings growth in GCC stock markets

Muscat - 

Companies listed on the Muscat Securities Market (MSM) posted the biggest growth in corporate earnings among the GCC markets in the first half of this year, according to a research conducted by Kuwait-based KAMCO Investment.

Oman was the best performing market in the GCC region with a total earnings growth of 9 per cent in the first half of 2019. ‘Earnings growth in Oman was closely followed by the Dubai market with total first half earnings growth of 8.8 per cent, while Kuwait reported an earnings growth of 4.7 per cent,’ KAMCO said in a research report released on Wednesday.

Although only three of the six GCC markets recorded declines in second quarter earnings, Saudi Arabia’s 37.1 per cent decrease in the second quarter was enough to drag the whole GCC markets’ earnings down. Qatari and Bahraini companies also witnessed year-on-year declines in earnings during the second quarter to the tune of 8.7 per cent and 11.2 per cent, respectively.

According to KAMCO, total earnings for GCC-listed companies dropped 14.7 per cent year-on-year in the second quarter of 2019 to US$15.8bn from US$18.5bn in the second quarter of 2018. GCC earnings also declined during the first half of 2019 as compared to the same period a year ago by almost 10 per cent with total net profits reaching US$32.8bn compared to US$36.4bn in the same period of the previous year.

Omani companies witnessed the biggest year-on-year growth in quarterly net profits during the second quarter with a surge of 20.9 per cent to reach US$490mn compared with US$405.4mn in the second quarter of 2018, KAMCO said.

Oman’s banking Sector, the biggest sector in the MSM by market cap, saw its second quarter net profits rise 6.9 per cent to US$252mn up from US$235.9mn in the second quarter of 2018, while the second biggest sector by market cap, the utilities sector, saw its second quarter profits rise 1.7 per cent to US$91.8mn, the figures showed.

‘In the banking sector, HSBC Bank Oman lead with the largest second quarter increase in absolute profits at US$28.9mn or 53 per cent year-on-year compared with US$18.9mn in same period of 2018. Increasing operating income combined with optimisation of operating expenses were attributed to the bank’s strong result. Similarly, other banks in the sector such as Bank Muscat and Bank Nizwa also posted improved second quarter net profits, contributing to the overall increase in profits of the exchange during during the second quarter,’ KAMCO said.

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