Market capitalisation of bonds and sukuk traded on the Muscat Securities Market (MSM) has crossed OMR1.8 billion, reflecting a continuation of the growth the bourse achieved over this year after listing the first OMR250 million worth of sovereign sukuk issued by the Sultanate’s Government.
Sukuk, which is considered a Sharia compatible financing tool, is the alternative of bonds in the traditional economy.
The market value of the traded bonds and sukuk as of the end of trading on November 12, rose to OMR1.868 billion, indicating a growth of 53.6 per cent, compared with December 2014 when it was OMR1.216 billion.
The listing of the sovereign sukuk at MSM provides investors with new options, encourages institutional investment and contributes to enhancing the market’s depth. The issue is the first sukuk issue to be listed at MSM, after changing the bonds market for bonds and sukuk market and after the measures taken to regularise the sukuk market.
It is expected that several companies will issue sukuk during the upcoming period to finance their projects.
The nominal value of the sovereign sukuk issued by the Sultanate of Oman is OMR1 for each sukuk, with a 3.5 per cent profit rate per annum. The maturity of the sukuk is five-year i.e. up to November 3, 2020.
The bonds and sukuk market constitutes 12.5 per cent of the MSM market capitalisation, which stood at OMR14,881 million as on November 12.
Several government and corporate bonds were issued in 2015, the most notable of which was the government development bonds worth of OMR300 million, with a 3 per cent profit rate per annum and maturity in August, 2020.
MSM also listed this year the issue No.46 of the government development bonds worth OMR200 million, with a 4.5 per cent interest rate per annum and maturity expected in February, 2025.