Muscat: Oman’s Muscat Securities Market has reconstituted the basket of stocks in the main general index – MSM30 Index – by replacing two less active shares with active stocks. The newly reconstituted index will be effective from July 3.
The stocks that are now included in the index, due to better liquidity, are Al Maha Ceramics and Phoenix Power, while the shares that are taken out of the index are Al Batinah Development and Investment Holding and Global Financial Investment, according to the local bourse.
Apart from a change in the general index, few changes have been made in the sub-sectors. Two companies – Global Financial Investment and Al Batinah Development and Investment - have been taken out of the financial sector sub-index. Two other firms – Al Madina Investment and Al Madina Takaful – have been included in the index to replace Global Financial Investment and Al Batinah Development.
Market sources said that the reshuffle in sub-sectors is in line with the practice followed by international bourses.
MSM 30 Index, the barometer of the market movement, is calculated after taking into account fluctuations in share values of thirty companies selected from three different sectors –financial, industry and services.
The reconstitution of the general index was part of an annual exercise to give prominence to the most actively traded stocks, while calculating the index. The selection is based on three criteria – liquidity, market capitalisation and earnings per share.
MSM-30 Index gives importance to company fundamentals while selecting the group of shares in the index. The company has to make profit for the last three consecutive years and the equity should not be eroded.
Among the 30 companies that constitute the MSM 30 index, 13 are from financial sector, 7 from industry and the remaining 10 from service sector.