Reforms at the Muscat Stock Exchange (MSX), supported by the Oman Investment Authority’s (OIA) divestment efforts and a series of prominent initial public offerings (IPOs), have markedly increased market liquidity and are advancing Oman’s prospects for emerging market status, officials stated during the Muscat Leadership Dialogue at the 2nd Oman Capital Market Conference.

Haitham bin Salim al Salmi, CEO of the Muscat Stock Exchange, highlighted that enhancing liquidity has been central to the exchange’s strategic overhaul. Oman’s market has long been characterized by strong dividend yields and solid corporate performance, yet limited liquidity has historically constrained stock valuations and dampened market responsiveness to positive business developments.

Al Salmi identified liquidity as the principal barrier preventing stock prices from fully reflecting company value. To overcome this, MSX prioritized achieving emerging market classification, aiming to boost trading volumes, market capitalization, and attract international investors.

Key reforms included lifting foreign ownership restrictions, which al Salmi noted significantly lowered obstacles for global participation. The exchange also introduced liquidity providers to stimulate trading and enhance price discovery. Collaborations with major institutional investors, including the Oman Investment Authority and pension funds, focused on increasing the free float of listed companies. Government-backed IPOs further attracted new investors and elevated Oman’s visibility internationally.

The exchange complemented these reforms with extensive investor outreach, engaging global financial institutions, brokers, and investors to raise awareness of opportunities in the Omani capital market. Al Salmi pointed to tangible outcomes in the form of rising trading volumes and recovering stock valuations, while noting that MSX’s dividend yields continue to compare favorably with other Gulf markets.

From the OIA side, Muneer al Muneeri, Deputy President for Operations, detailed the sovereign wealth fund’s integral role in shaping the exchange’s development. Since its establishment in 2020, OIA has implemented a comprehensive strategy to strengthen market infrastructure, governance standards, and competitiveness. This included restructuring MSX’s operational model, enhancing human capital, and improving investor-friendly governance frameworks.

A cornerstone of OIA’s approach has been its divestment program, aimed at monetizing stakes in over 150 domestic companies to deepen capital market activity. Since launch, OIA has divested holdings in approximately 24 companies, conducting six of these exits via IPOs. These efforts have diversified the exchange’s sectoral makeup, notably increasing representation from the oil and gas industry, including exploration, production, and energy infrastructure firms. Historically underrepresented despite the sector’s economic importance, these additions have expanded investment options and improved the market’s sectoral balance.

Together, these reforms and initiatives reflect a coordinated effort to enhance Oman’s capital markets, with officials optimistic that these strides will support the country’s advancement to emerging market classification.