With global exchange trends moving toward digitization, automation, and technological upgrades, how is the CMA remaining ahead of the curve?
AL-SALMI: We started using electronic trading systems in 1997. Just a few years ago we moved to a new system called Atos Euronext. It is quite an advanced electronic system. Also, we are adding an electronic system in the clearing and settlement house of ours which is the Muscat Clearing & Depository Company. This is also using very advanced electronic systems. So we are definitely getting there, we are equal to many of the others if not ahead of curve.
How has financial malpractice in the west impacted the CMA’s overall strategy and governance?
AL-SALMI: After the financial crisis happened in 2008, a lot of measures have taken place in the US, Europe, and elsewhere. Though we were not directly affected by the financial crisis, we are a part of the whole global financial system. So when a lot of changes were made in these countries, we have to really take them into account and try to find a way to accommodate their financial situation. For example, we have recently signed the International Organization of Securities Commissions (IOSCO) MoU. To do so, there were certain measures and elements that had to be incorporated into our rules and regulations. We are acknowledging these countries and trying to accommodate them.
Where does the Muscat Securities Market (MSM) volume stand today? What are your expectations for the future?
AL-SALMI: Because of the financial crisis, we have experienced difficulties in terms of volumes, and also in terms of the valuation of stocks that are listed on the MSM. But since the beginning of this year, we have seen quite a good development in both volumes and valuation in terms of pricing. The index is trying to regain some of what it lost in the previous years. In terms of volumes, we are experiencing around OMR 4m ($10m) a day. This has been changing since the beginning of the year. We are talking about OMR 10-15m ($26-39m) on average a day. So there is a good development of the MSM and there are positive signs going towards the future.
To what extent is there a coordinated regulatory effort across the GCC with regards to the capital markets?
AL-SALMI: The coordination takes place in two ways. One is direct coordination between us and our colleagues in the GCC countries, and the other path of cooperation comes under the GCC security umbrella. There has been a decision taken by the Supreme Council of the GCC to integrate the GCC markets and I think that is very important. We have seven exchanges within the region, small exchanges, and the biggest is Saudi. But the others are really not as big. So bringing those seven exchanges together in a common platform would definitely change the picture for the whole region and would present the region as an investment opportunity that international investors can see clearly on the radar screen.
In what ways is the CMA working with other regional regulatory authorities?
AL-SALMI: We are working under the security of the GCC to harmonize the rules and regulations that are governing the capital markets in the GCC and are aiming to reach a level where, for example, a company that is listed on the Muscat Securities Market can be treated at a listed company on other exchanges. So we use a common platform for all the exchanges and brokers. We are aiming at integrating the whole capital market throughout the whole GCC.
Looking at the market right now, the economy of Oman isn’t truly represented. We are talking about total market cap of only 37% of the total GDP of Oman. We are aiming to bring this percentage up to the norm in the region.
Of all the GCC countries, only the UAE and Oman enhanced their rankings in the World Bank’s Doing Business report in 2013. Oman succeeded in improving its ranking to 47th in the last report. What role does financial service regulation play in improving the ease of doing business?
AL-SALMI: An ambition of all officials here in Oman is to improve the business environment of the country. I think it is going on quite well. As a result, apart from looking into the rules and regulations, there is development of infrastructure. Oman is trying to mostly reduce the bureaucracy in getting things done. I think we are progressing quite well in that regard. We are hoping to get Oman to be in the top 10, and to be one of the best countries to do business in.
What are your future projections for Oman’s capital markets? Which indicators are showing the most positive trends and which remain challenges?
AL-SALMI: Looking at the market right now, the economy of Oman isn’t truly represented. We are talking about total market cap of only 37% of the total GDP of Oman. We are aiming to bring this percentage up to the norm in the region. Right now it is at about around 85%, and in other regions it is about 100% and more. That’s our goal. Additionally, we want to bring the rules and regulations that are governing our capital market up to the level where the market can be understood and recognized internationally. We are hoping to be there soon.