Major Omani firms that constitute MSM 30 Index are expected to post a growth in both net earnings and revenue for the first nine months of 2016, over the same period of 2015.
The net earnings of MSM 30 companies are expected to achieve a year-on-year growth of 6.4 per cent at OMR544.18 million during January-September 2016 period, said a research note released by the Gulf Baader Capital Markets on Wednesday.
“The growth in profitability is driven by strong performance of few companies in the industrial and service sectors,” added the research note.
Gulf Baader also said that the combined anticipated revenue of MSM 30 firms for the nine-month period could be at OMR3.06 billion, registering a year-on-year growth of 5.9 per cent.
“During the first half of 2016, most of the listed companies accounted for 12 per cent corporate tax rate. With the Royal Decree pending with respect to the change in taxation, we have also assumed 12 per cent tax rate in our third quarter 2016 estimate,” it added.
The revenue of MSM 30 companies, excluding investment holding firms, for January-September period is estimated to grow by 3.2 per cent at OMR2.88 billion, while earnings of index companies are projected to increase by 5.6 per cent year-on-year to OMR516.46 million.
Banking sector:
Among various segments, banking sector revenue is anticipated to grow by 4.4 per cent on year-on-year amid continued and stable credit growth. However, on the other hand, the negative impact on the increase in funding costs will put pressure on net interest margins. Banking sector earnings for the nine-month period is anticipated to reveal a marginal growth of 0.8 per cent at OMR261.55 million.
During January-July 2016 period, Oman’s banking sector credit (conventional and Islamic combined) grew by OMR1.425 billion in absolute terms, showing a growth of 11.5 per cent year-on-year and 7.1 per cent on year- to-date basis amid increase in private sector and retail credit demand.
“For the third quarter of 2016, we expect banking sector credit addition to be at OMR400 million, an increase of 1.9 per cent on a quarter-on-quarter basis. For 2016, we estimated the sector credit growth to be 8-10 per cent levels,” noted the report.
Also, earnings of investment holding companies for January-September period are estimated at OMR27.72 million, a growth of 25 per cent year on year on low base. For the financial sector, the nine-month period earnings are estimated to reveal a moderate growth of 3 per cent year-on-year at OMR293.58 million.
As far as the industrial sector is concerned, the total revenue is anticipated to decline by 1.6 per cent on year-on-year on the back of subdued performance of construction and building material sectors along with the prevailing low commodity prices. “We have seen sharp reduction in the new project announcements in Oman, which would in turn impact the visibility to an extent.”
The earnings of industrial sector firms are expected to grow by 13.9 per cent on year-on-year to OMR46.10 million amid earnings recovery from the cement sector companies.
The revenue of service sector companies for the nine-month period is estimated to achieve a year-on-year growth of 4.4 per cent amid growth seen in most of the sector companies. The sector earnings are set to grow higher by 9.9 per cent to OMR204.50 million.
The net earnings of MSM 30 companies are expected to achieve a year-on-year growth of 6.4 per cent at OMR544.18 million during January-September 2016 period, said a research note released by the Gulf Baader Capital Markets on Wednesday.
“The growth in profitability is driven by strong performance of few companies in the industrial and service sectors,” added the research note.
Gulf Baader also said that the combined anticipated revenue of MSM 30 firms for the nine-month period could be at OMR3.06 billion, registering a year-on-year growth of 5.9 per cent.
“During the first half of 2016, most of the listed companies accounted for 12 per cent corporate tax rate. With the Royal Decree pending with respect to the change in taxation, we have also assumed 12 per cent tax rate in our third quarter 2016 estimate,” it added.
The revenue of MSM 30 companies, excluding investment holding firms, for January-September period is estimated to grow by 3.2 per cent at OMR2.88 billion, while earnings of index companies are projected to increase by 5.6 per cent year-on-year to OMR516.46 million.
Banking sector:
Among various segments, banking sector revenue is anticipated to grow by 4.4 per cent on year-on-year amid continued and stable credit growth. However, on the other hand, the negative impact on the increase in funding costs will put pressure on net interest margins. Banking sector earnings for the nine-month period is anticipated to reveal a marginal growth of 0.8 per cent at OMR261.55 million.
During January-July 2016 period, Oman’s banking sector credit (conventional and Islamic combined) grew by OMR1.425 billion in absolute terms, showing a growth of 11.5 per cent year-on-year and 7.1 per cent on year- to-date basis amid increase in private sector and retail credit demand.
“For the third quarter of 2016, we expect banking sector credit addition to be at OMR400 million, an increase of 1.9 per cent on a quarter-on-quarter basis. For 2016, we estimated the sector credit growth to be 8-10 per cent levels,” noted the report.
Also, earnings of investment holding companies for January-September period are estimated at OMR27.72 million, a growth of 25 per cent year on year on low base. For the financial sector, the nine-month period earnings are estimated to reveal a moderate growth of 3 per cent year-on-year at OMR293.58 million.
As far as the industrial sector is concerned, the total revenue is anticipated to decline by 1.6 per cent on year-on-year on the back of subdued performance of construction and building material sectors along with the prevailing low commodity prices. “We have seen sharp reduction in the new project announcements in Oman, which would in turn impact the visibility to an extent.”
The earnings of industrial sector firms are expected to grow by 13.9 per cent on year-on-year to OMR46.10 million amid earnings recovery from the cement sector companies.
The revenue of service sector companies for the nine-month period is estimated to achieve a year-on-year growth of 4.4 per cent amid growth seen in most of the sector companies. The sector earnings are set to grow higher by 9.9 per cent to OMR204.50 million.
Source Link: timesofoman.com
POST A COMMENT
