MUSCAT: Oman’s Muscat bourse will start ‘day trading’ with lower brokerage fee or cost of transaction from Sunday. In fact, day trading is buying and selling of a share in the same trading session, or selling existing shares and buying them back in the same day through the same broker.
The investors who are engaged in day trade are entitled for a 50 per cent discount on commission, which is fixed at 0.000175 per cent. “The discount will be applicable on trading conducted by all clients, except trust accounts,” said an MSM statement. The day trading is usually conducted by traders who try to make profit by taking advantage of small price movements in highly liquid stocks.
The new trading scheme with lower commission was introduced to improve liquidity and trading volumes. The Muscat Securities Market has been facing low liquidity and traded volumes for the last few months. “The idea is to enhance liquidity in the market. With a reduction in brokerage fee, day traders can easily enter the market,” Ahmed Saleh Al Marhoon, director-general of the Muscat Securities Market, had told ‘Times of Oman’ in October. “We hope that the reduction in brokerage fee or transaction cost is an encouragement for day traders to become more active on the bourse.”
Each investor has a ceiling of 200,000 shares of each approved company per trading session. Any day trading after the cap will be considered normal trading and the normal trading commission is applied. As many as 30 companies have been approved by the Muscat bourse for conducting day trading, which was based on annual trading volumes. However, the total trading days of the company, during a year, will not be less than 50 per cent of the total trading days. Brokerage firms on the MSM have to ensure that clients have sufficient cash in their accounts for conducting day trading.
The approved companies for day trading are Bank Muscat, Oman Telecommunications Company, Al Anwar Holding, Bank Sohar, Galfar Engineering and Contracting, Omani-Qatari Telecommunications Company (Ooredoo), Oman International Development and Investment Company (Ominvest), Bank Nizwa, Oman Investment and Finance Co., Phoenix Power, Renaissance Services, Al Jazeera Steel Products, National Bank of Oman, Oman United Insurance, Al Sharqiyah Investment Holding, HSBC Bank Oman, Raysut Cement, Global Financial Investment, Bank Dhofar, Oman Cement, Sembcorp Salalah, Port Services Corporation, Al Anwar Ceramic Tiles, Oman and Emirates Investment Holding, National Gas, Oman Cables Industry, Alizz Islamic Bank, Gulf Investments Services Holding, Gulf International Chemicals and Al Maha Ceramics. The MSM and Oman Brokers’ Association will review the list of companies on the basis of traded volumes after a certain period.
