JUNE 2013 - FEAS

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013MUSCAT SECURITIES MARKETCAPITAL MARKET DEVELOPMENTAND ECONOMIC OUTLOOKThe Omani national economy continued itsgood performance in the year 2011 in spiteof the negative developments of the globaleconomy as a result of lowering the credit ratingof the United States and the sovereign debtcrisis, which hit some European economiesand had spillover effects on a number of worldeconomies. The strong performance of theOmani economy is attributed to the realisticand flexible economic policies adopted by theSultanate as well as the increase in the rates ofthe oil production, the remarkable improvementin oil prices and the expansionary fiscal andmonetary policies adopted by the Governmentto enable the economy to achieve stability andgrowth.Leading amongst the indicators of the stabilityand growth of the Omani economy during 2011were the overall positive results, which includea significant growth rate of 7% exceeding thatof 2010 which amounted to 6%. Moreover, thebalance of trade of the Sultanate achievedremarkable growth of 34% in 2011 comparedto 32% in 2010. However, despite the increasedpublic expenditure during 2011, inflation rateremained at the level of 3.6%, which is within thetargeted limit of 4%.Regarding the expectations of the Omanieconomy for 2012, it should be noted that inlight of the wise economic and fiscal policiesthat support the growth and stability of thenational economy, the Sultanate of Oman hasincreased the general expenditure approvedin the budget to about RO 10 billion, withan increase of RO 800 million or 9% overthe revised expenditure of the previous year2011. Current expenditure is estimated at RO6.4 billion, which constitutes 64% of the totalgeneral expenditure around 2.7 billion of whichare investment spending, representing 27% ofthe total general expenditure.The general revenues of the State for the year2012 were estimated by about RO 8.8 billionagainst RO 7.3 billion in the budget of thefiscal year 2011, with an increase of RO 1.5billion, i.e. 21 per cent compared to 2011. Oiland gas revenues constitute 81 per cent of thetotal revenues, whereas the current and capitalrevenues constitute 19 per cent thereof.The oil revenues were calculated on the basisof average price US$ 75 per barrel and averagedaily production of 915 thousand barrel per day.As regards to the budget deficit, it is estimatedto amount to RO 1.2 billion, i.e. 5 per cent ofthe Gross Domestic Production, which is a safepercentage. This deficit will be covered throughthe issuance of development bonds in thedomestic market amounting to RO 200 million.It will also be covered from the real revenues ofoil prices because the current prices are higherthan those upon which basis the state revenuesare calculated. In case this is not realized, thedeficit shall be covered from the state generalreserve.Key Information ContactsMinistry of National Economy www.moneoman.gov.omCapital Market Authority www.cma-oman.gov.omOman Chamber of Commerce and Industry www.cbo-oman.orgFinancial Corporation www.fincorp.orgNational Bank of Oman www.nbo.co.omCONTACT INFORMATIONContact Name Mr. Asal Farsi E-mail asalfarsi@msm.gov.om Website www.msm.gov.omPAGE 72