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Extend MSM trading time, operators urge.

MUSCAT: Market operators on the Muscat Securities Market (MSM) are urging extension of trading time on the bourse to enhance trading volumes. A section of operators believe that if MSM extends trading time by one or two hours, the local bourse will be aligned with regional markets, which in turn will enhance participation from foreign investors.

MSM, which is open for trading for three hours between 10am and 1pm, is one of the regional bourses that have minimum trading time.

"Trading for only three hours is a limitation. By the time European markets start trading, Oman bourse approaches its closing time and therefore, investors can not get cues from western markets to take investment decisions. If we extend trading time by one or two hours, fund managers will be in a better position to take investment decisions based on the developments in European markets," Gigi Tharian Varghese, Associate Vice-President of Vision Securities, told Times of Oman. Echoing a similar view, Anil Kumar, vice-president of the Financial Corporation, said that markets like Dubai, Saudi Arabia and Kuwait are open for trading for four-and-a-half hours.

Aligning with neighbours

"Probably, an extension of half-an-hour (to one hour) will make our market align with the neighbouring bourses and thereby make it convenient for regional retail investors and pension funds in Bahrain, Kuwait and Saudi Arabia to invest in MSM," he added.

Anil Kumar added that India extended trading time by one hour to align with Hong Kong and Singapore bourses three months ago.

"We are all part of a global market now. We have to extend the time in line with neighbourig markets. When we close here, the European markets commence trading," noted a broker, who does not want to be named.

Citing another advantage, Varghese said that an extension of trading time will also help local retail investors, who work in offices, to spare time to trade on the bourse after their lunch break at 1pm.

Lack of initial public offerings and a dearth of knowledge on systematic investment plans (like mutual fund schemes) are cited as major reasons for low volumes on the bourse. Slowing down of investment by pension fund is another reason for listless activity.

Dwindling volumes

Market operators said that the bourse authorities have to take urgent measures to arrest dwindling volumes by activating trading. Although turnover on MSM picked up to RO6.27 million yesterday, the daily trading volumes were low for more than two months.

The average daily turnover in June this year dipped to RO4.03 million, from RO14.12 million for the same period last year. Similarly, the average daily turnover for the first six months of 2010 receded to RO5.27 million from RO8.92 million recorded for the same period of 2009. If the turnover continues at this level, the very viability of small brokerage firms is in question.

Muscat Press and Publishing House SAOC 2009

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Publication:Times of Oman (Muscat, Oman)
Date:Aug 7, 2010
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