How To Invest in the Muscat Securities Market in 6 Steps
Pick a Broker: Brokerage Companies are authorised intermediaries to trade financial assets on the Muscat Securities Market.
Open a Trading Account with a local broker: The only requirement is to be of legal age and reside in Oman. The broker will provide access to their investment platforms, allowing you to send purchase and sale orders to the Muscat Securities Market's central system.
Choose the Financial Asset to Invest in: Investors must decide whether to invest in stocks, bonds, sukuk, and mutual funds.
After deciding, send a Buy order through the broker: You must submit a purchase order for a financial asset. Setting a limit or market price for the selected asset is possible.
The financial transaction is effective when the buy and sell prices match: When a financial asset's bidding price (the buyer) coincides with the asking price (the seller), the trade gets executed. The Brokers pay at the Stock Exchange in your name and deliver the transaction amount to the buyer/seller. You become the legal owner of the asset.
The broker issues the transaction notification and charges fees: There is no fixed fee, which means that when choosing a broker, you will have to choose a broker that can better adapt to your investment strategy.
How does the Muscat Securities Market work?
The Muscat Securities Market (MSM) was established as a public institution with a legal entity. It seeks to encourage saving, disseminate investment awareness, and protect investors. MSM allows trading in public joint-stock companies, government bonds, corporate bonds, investment funds, and other financial instruments.
In short, the stock exchange is the institution that facilitates the negotiation of financial instruments in Oman. As a result, the supply of financial instruments such as stocks, bonds, and currencies and the demand for these instruments (i.e., investors) interact.
The Stock Exchange holds daily "Trading Sessions", providing the material, technological, human, and operational means that allow efficient interaction between Brokers, Issuers, and Investors.
What is a Securities Issuer?
Issuers of securities are companies that seek to grow through raising capital at the Muscat Securities Market. These companies raise money by issuing debt (bonds) or capital (shares). Issuers of securities may be government-controlled entities or private companies, but no matter who owns the company, the issuer backs the investment. For example, if you invested in bonds or sukuk from a private company, the company must pay the bond investors' principal and interests. As of Feb 2023, the following companies issued shares:
Financials: Ahli Bank; Arabia Falcon Ins.; Ahlia Insurance; Muscat Insurance; Nat. Real Estate; Madina Takaful; Al Madina Inv.; Al Omaniya Fin.S ; Bank Dhofar; Bank Nizwa; Al Batinah Dev.; Dhofar Insurance; Dhofar Int.; Financial Corp.; Global Inv. H; Gulf Invest. Hold; United Finance; Taageer Finance; Takaful Oman; HSBC Bank Oman; National Bank Oman; National Life Ins; Oman Emirates Ho.; Oman Qatar Insur.; Oman United Insur; National Finance; Alanwar Investment; Bank Muscat; Sohar Int. Bank; Muscat Finance; Ominvest; Al Sharqia Inv.; Vision Insurance; Gulf Inv. Ser.-Pre; Financial Serv.; Oman Arab Bank; and Ahli Bank Right. Is.
Industrials: Construction M.; Al Anwar Ceramic; Fajar Alamia; National Biscuit; Oman Chromite; Packaging Co. Ltd; Computer St.Ind; Dhofar Beverages; Jazeera Steel Prod; Dhofar Cattle; Galfar Engineer.; Gulf Int. Chemi.; Voltamp Energy; Asaffa Foods; Salalah Mills; Majan Glass; Muscat Thread Mill; Aluminium Prod.; Gulf Mushroom P; and Gulf Stones.
Services: Al Buraimi Hotel; Albatinah Hotels; Dhofar Tourism; Gulf Hotels (Om); Hotels Mn.Co.Int; Sahara Hospitality; Salalah Beach Reso; United Power; United Power-Pref.; Aljazeera Services; Acwa Power Barka; Majan College; Albatinah Power; Dhofar Generating; Ubar Hotels And Resorts; Al Suwadi Power; Sembcorp Salalah; Salalah Port Sr; Smn Power Holding; Sharqiyah Desalin.; Sohar Power; Renaissance Ser.; Phoenix Power; Al Kamel Power; Mct Desalinate; Muscat Gases; Musandam Power; Oman Edu Training; Oman Invst & Fin.; Oman Nat. Eng.; Oman Oil Marketing; Oman Oil- Pref.; Shell Om- Pref.Sh; Al Maha Markting; National Gas; Ooredoo; Oman Telecom; Shell Oman Mrk.; and Jazerah Ser-P.
If you were trying to find OQ in the list, don't try anymore: OQ is owned by the Government, so it never issued shares in the Securities Market.
International Brokers operate easy-to-use apps that allow you to buy and trade financial assets (like US Stocks, Commodities, Indices) on any device.
How is a Trade completed in the Stock Exchange?
A trade, or, in other words, the investment flow of any financial instrument, could be summarised as follows:
Sellers (supply) offer to sell a financial instrument at a price, for example, Oman Telecom shares. Sellers aim to make this price as high as possible (Price 1).
Investors (demand) who wish to obtain the Shares make an offer at a determined price level. They want this price to be as low as possible (Price 2). Then, Price 1 is higher than Price 2.
Buyers interact with sellers until they are at the point where Price 1 equals Price 2. The trade occurs when this occurs, and the Oman Telecom shares exchange hands between the seller and the buyer. A broker is needed to fulfil this transaction: A broker is a company that mediates between sellers and buyers, ordering prices and quantities of financial instruments. Below we'd like to explain the services that these companies provide.
What is a Stock Exchange Broker?
Financial Transactions should be performed through a company that works as an intermediary between investors and sellers. These intermediaries are known as Brokers.
Through complex technological tools, brokers manage transactions between investors, ordering the purchase and sale orders of financial assets by price and by order of arrival. By performing this service, they obtain a commission when, for example, executing buying a share.
An investor must open an account with a local broker to buy shares that trade in the Muscat Securities Market. As of April 2023, there were 9 Licensed Brokerage Companies: Financial Services; United Securities; National Bank of Oman; Global Financial Securities; EFG Hermes Oman; FINCORP; Ubhar Capital; Ahli Bank, and Horizons Capital Markets.
Investing in International Financial Assets from Oman
As we have mentioned in this guide, financial assets must be traded through a Broker. If you decide to open an account with a broker operating in the Muscat Exchange, you can trade assets listed locally only.
If you, in turn, decide to open an account with an international Broker, you may invest in countless global assets. In other words, you can invest in international financial assets, such as stocks listed on the New York Stock Exchange from Oman, through an international Broker.
The job of an international Broker is to connect their clients with international Stock Exchanges. In other words, if a client intends to buy Apple shares (listed in the NYSE, New York Stock Exchange), the broker acquires the shares in the client's name and deposits the values in the client's trading account. Almost all International Brokers generally provide access to Exchanges from the United States, Canada, the UK, Japan, Switzerland, and Europe.
Opening an account with an international broker is usually an online process, and you can trade the financial markets from your phone in just a few days.
International Brokers available in Oman
This article will help you start investing, from the minimum amount of money required to open an account to some ideas to consider in your portfolio.
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