In an attempt to club all blue chip stocks under a separate market segment, the Muscat Securities Market (MSM) has divided listed joint stock companies into six different sub-segments.
All the best performing companies have been brought into the regular market after evaluating the firms on the basis of eight new criteria, which include a higher paid up capital of OMR5 million, instead of OMR2 million earlier, posting net profits not less than 5 per cent of paid-up capital for the last two years, a minimum of 40 per cent free floating shares on the bourse and shareholders’ equity of not less than 120 per cent of paid-up capital.
“We want to put all blue-chip companies in the regular market. The criteria for listing in the regular market are tough in an attempt to select the best performing companies,” said an official at the MSM, on the condition of anonymity. The new regulation will be introduced on September 4. The Muscat bourse has 128 listed companies.
The companies will need to mandatorily fulfill seven parameters out of the eight parameters and stipulations on minimum capital and net profit are compulsory.
The six sub-segments in the market are regular market, parallel market, follow-up market, bonds and the sukuk market, along with the rights issue market and third market. This is in comparison with only four markets existing earlier.
Earlier, there were some issues regarding stock liquidity of certain shares in the regular market. The authorities have studied all companies in detail to place the best performing companies on the regular market and if a company does not meet the criteria, it will be shifted to the parallel market.
With the new structure, 28 companies have been included in the regular market, 75 in the parallel market, 13 in the follow-up market and 24 in the bonds and sukuk market. The third market is for closely held firms, which are not traded on the bourse on a regular basis.