The year 2015 is expected to be a buoyant one for the infrastructure sector in Oman, says Reji Joseph, CEO of Al Anwar Holdings.
The Sultanate’s budget of 2014 was based on the oil price of $85 per barrel while the average price realisation was around $105. This resulted in fiscal surplus of RO136mn as of September 2014. For the first half of 2014, Oman had a GDP growth of 3.7 per cent. It is interesting to note that the non-petroleum sector grew by 7.3 per cent. This implies that efforts to diversify the economy is making progress. This will surely have positive implications in the long term.
Oman has been witnessing a lot of development – diverse and infrastructural. The current projects include the Khazzan Project, the National Railway, Duqm Refinery/ Petro and Frontier projects, Muscat and Salalah Airports, Batinah Expressway, Liwa Plastics – the gas based steel plant, the Middle East to India gas pipeline project besides others. The prudent policies of His Majesty have ensured stability and growth; and this is expected to continue with the pace of development. During the previous regional financial crisis, Oman continued its development activities with road network, infra, new ports and new airport projects. Oman has continued to invest in development and infrastructure and this will position the nation for the future.
We must be mindful that the current oil pricing is not a doomsday scenario as most analysts have predicted very bad days ahead. We must remember that at one stage oil traded at $12 and this did not result in any collapse of any of the oil rich nations. The current low price is only a recent phenomenon and there will be real damage only if the price stays at very low levels for three years as the GCC nations have adequate buffers to work out its finances.
Specific to Oman, 2014 was set to be the most active year since 2006, for oil and gas contractors in Oman. And with key oil, gas and chemicals projects in the pipeline, such as the Khazzan tight gas development, the Duqm refinery and the Liwa plastics complex, 2015 is expected to be a buoyant year for the infrastructure sector in Oman. The economic fundamentals are robust. Most of the nation’s success comes from its ability to withstand the crisis period and innovate its growth path in the world panorama.
The year 2014 was an eventful one for Al Anwar Holdings. On the transaction side, we completed two major events. We sold our stake in Taageer Finance Company and had a successful IPO for Al Maha Ceramics. Al Maha Ceramics did extremely well on its listing with an over subscription of 20 times and listed at a 70 per cent premium to the issue price. The companies in our group continue to do well and there have been constant efforts to improve market share and profitability. Our profitability increased by 25 per cent for the first half year ended on September 30, 2014. We have been one of the most active investment companies in Oman in 2014.
We constantly test our investment model and we feel it is adequate for the current environment and it has proved time and time again to be resilient. All our major investments are doing well this year and we expect this trend to continue. We are sure that our investment model will continue to evolve and remain responsive to the market with a view to enhance shareholders’ equity and market perception.
Overall, a competitive environment should nurture a fertile ground for the entrepreneurial spirit and foster an environment conducive for business growth. This must translate into lucrative investment opportunities and a healthy progress on our existing business ventures. We, at Al Anwar Holdings are confident that we are well positioned for a responsible growth.