MUSCAT: Oman’s stock market regulator Capital Market Authority (CMA) will not relax its stipulation that national insurance companies offer shares to investors before August 2017, a top official declared.
Accordingly, at least seven national insurance firms will have to float shares on the Muscat Securities Market (MSM) before August this year.
“All national insurance companies (excluding branch operations of foreign companies) will have to go public by August, as per the law. There is no relaxation in the insurance law,” Abdullah bin Salim Al Salmi, executive president of the CMA.
In 2014, the Omani government had asked national insurance firms to float shares on the MSM within three years, besides raising their minimum capital to OMR10 million from OMR5 million. Insurance firms must comply with all the listing requirements and promoters will have to divest 40 per cent in favour of investors.
The CMA chief revealed that some national companies were trying to encourage mergers, which would reduce the number of firms. “This will help to create better and financially strong companies.”
The national insurance firms that are expected to float shares on the local bourse include Al Ahlia Insurance Company, Muscat Insurance, Muscat Life Insurance, National Life Insurance and Oman and Qatar Insurance. Last month, Al Anwar Holding and 13 other minority stake holders of Falcon Insurance Company (FIC) decided to sell their stake in FIC to Arabian Insurance Company (AIC) and Lawrence Investment. Al Anwar Holding will sell 20.35 per cent stake, at a price of OMR1.876 per share, according to a disclosure statement posted by Al Anwar Holding last month on the MSM website.
Although the Sultanate has 22 insurance companies (11 locally incorporated and 11 branch operations of foreign firms), only four companies — Dhofar Insurance, Oman United Insurance, Al Madina Takaful and Takaful Oman — are listed. Of these, Al Madina Takaful and Takaful Oman are Islamic insurance firms.
The regulations will mark a new chapter in the Omani insurance sector, as local companies will be able to withstand competition by strengthening their financial, technical and human resources. A higher capital base will make these institutions large enough to underwrite more risks and retain premiums within the country.
