Business Finance ( FINA 110)
Homework (2)
Submitted Date: 23/2/2010
Instructor: Abdullah Al Shukaili
The Muscat Securities Market (MSM) was established by the Royal Decree (53/88) issued on 21 June 1988 to regulate and control the Omani securities market and to participate, effectively, with other organizations for setting up the infrastructure of the Sultanate's financial sector.
The Royal Decree (80/98) dated November 9th 1998 which promulgated the new Capital Market Law provides for the establishment of two separate entities, an exchange, Muscat Securities Market (MSM) where all listed securities shall be traded and the Capital Market Authority(CMA) - the regulatory. The Exchange is a governmental entity, financially and administratively independent from the regulatory but subject to its supervision. Thus the securities industry in Oman was well established to enhance investors' confidence by developing and improving all the processes appertaining to the stock market.
The Objectives of MSM
The MSM has been established as apublic organization with independent legal entity. It aims to encourage saving and improve investment awareness as well as protecting investors.
The MSM targets to provide a better environment for investing funds in securities and to, consequently realize mutual benefit to national economy and investors. It also facilitates the trading of securities issued by joint stock companies as well as bonds issued by the government, commercial companies, investment fund’s units and any other domestic or foreign securities agreed upon by the Market.
To achieve the above objectives the MSM shall undertake the following:-
(a) Provide investment opportunities in securities in order to enhance the national economy.
(b) Regulate dealings in securities and provide protection to investors from unfair and unsound dealings.
(c) Provide a suitable environment for maintaining the counterbalance between supply and demand and the easy liquidation of funds invested in securities.
(d) Apply the regulations, instructions and advanced electronic systems that guarantee the regular dealing in securities pursuant to the recognized international principles.
(e) Improve the professional ethics and upgrading employees’ efficiency within the scope of securities industry.
Reference: http://www.msm.gov.om/
Until 1998, the MSM had been managing the exchange and acting as the central depository. Now, we are separating the Exchange and the Depository from the Regulator. Today we have three separate organizations, each with it's own Board of Directors.
The main reason for the restructuring is to separate and clarify the objectives and tasks of each organization. This clarity of purposes makes each organization more effective as well as making our organizations closer to the international standards of practice, where the norm is to have an independent regulator which is the regulatory authority for the exchanges, the depository and market participants.
The regulator has been defined as Capital Market Authority. It regulates the Exchange , the Depository, the capital markets and their participants.
The Exchange (MSM) has maintains the previous name i.e. Muscat Securities Market. The Exchange exercises an important self-regulatory functions over the brokers and the listed companies, in addition to continuing running the exchange and provide services to its members.
The Depository is now the Muscat Depository & Securities Registration Company, (SAOC).
Important Note:
Working hours: 8 A.M to 3 PM
Working days: Sunday to Thursday
Week ends : Friday and Saturday
Trading Hours:
Pre-Opening Session: from 9:30 am to 10:00 am
Trading Session: from 10:00 am to 13:00 pm
Closing Session: 13:00 pm
Inthe area of information technology the Market finalized the procedures with regard to the replacement of the present trading system, which is in existence since 1998,with a more efficient system that operates in line with the international standards and prevailing in many modern markets and matches well with the key objective of the Market, which is the development of Oman’s securities industry .
MSM Has been running electronic trading system from Atos Euronext France, which is a very sophisticated system used in many developed markets. The new system ensures providing the data and information immediately for the supervisory authorities to enable them to activate the regulatory role in trading. Further, the system broadcasts the trading data immediately to all users and will facilitate the Market to add many investment instruments in the future as well as to make an easy link with the other stock markets in the GCC and other countries. The new system is also expected to make the information dissemination more efficient.
Read the above information and answer the following questions:-
1- Why do you think that Muscat Security Market is categorized as a capital market?
2- What are the purposes of Muscat Security Market in the national economy?
3- Visit the Muscat Security Market website and bring two examples of companies that are listed under the following sectors:-
A. Banking and Investment sector
B. Industrial sector
C. Services and Insurance sector