MUSCAT: Oman’s bourse needs market-makers to develop an active secondary market for debt instruments, said a top-level official at the Capital Market Authority (CMA). The market makers, who are prevalent in developed bourses, are a group of broker-dealers who help strengthening trading volumes with frequent trading. “We need to have market makers for activating the secondary market for debt instruments. But before that we need to have a sizable bond market,” Abdullah bin Salem Al Salmi, executive president of the Capital Market Authority, told Times of Oman.
The CMA chief also said that brokerage firms can act as market makers. “Anyone can apply for a market-maker licence. But the economic condition is not conducive for market maker to be active. The liquidity (in the market) is not enough. Market makers need a certain amount of liquidity and depth,” he added.
Oman’s corporate sector and government have been resorting to the market for funds by way of bonds and sukuk. This year alone, the Central Bank of Oman has raised OMR300 million worth of bonds so far, while another bond issue to raise OMR150 million will be floated towards the end of the year. Besides, Oman government issued its maiden sovereign sukuk last year for raising OMR250 million, which received an overwhelming response. Developing a vibrant sukuk market is also important for government to raise money for funding infrastructure projects in a Sharia-compliant manner. Development of a yield curve is vital for encouraging companies to come out with Islamic debt instrument or sukuks.
