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Oman 2014 | FINANCE | INTERVIEW

TBY talks to Ali Mohammed Juma, Chief Executive of Vision Investment Services, on Islamic banking, the Muscat Securities Market (MSM), and the role of the local regulator.

Ali Mohammed Juma
BIOGRAPHY
Ali Mohammed Juma is the Co-Founder and Chief Executive of Vision Investments Services, one of the leading investment advisory and asset management companies in the Sultanate of Oman. He is a Mathematics and Computing graduate and has pursued several advanced courses in Management and Finance from leading European and American business schools. He is the Chairman of Vision Insurance Company, Vision Emerging GCC Fund, and the Mohammed Juma Sultan Group of Companies. He is also a Board Member of Vision Emerging Oman Fund, Vision Al Khair GCC Fund (sharia compliant), and Al Hassan Engineering.

What is the composition of your portfolio?

We have around OMR100 million under management in public equity portfolios and funds. In 2013, we launched the first sharia-compliant fund in Oman, called Al Khair GCC Fund, which has been well received in the region. We are in the process of setting up two new divisions: one for private equity and the other division focuses on real estate investment opportunities.

Could you highlight the recent track record of the funds managed by Vision?

In terms of equity mutual funds, Vision's Emerging Oman Fund has been rated as the best Oman equity fund in the region, and our Vision Emerging GCC fund was ranked number two in the region among all the funds for 2012 by Zawya Ranking System, a leading financial online portal that is part of Thomson Reuters. The fact that our funds and portfolios have consistently outperformed benchmark indices even in poor market conditions speaks volumes for our regional reputation. In fact, in 2011 S&P wrote that we were very well positioned to offer institutional clients a wide range of products and services.

How do you assess the performance of the Muscat Securities Market (MSM) in 2013?

The main driver of the Omani economy, apart from the banking sector, is government expenditure and family business. However, there is no adequate representation in the MSM and hence does not reflect the economic progress of the country in full measure. The government-led project, through public and private sector participation, includes a wide range of infrastructural spending, though is yet to find a place in the MSM through IPOs or listings. Similarly, family offices and business have no incentive to approach the equity market as they have access to cheap funds from banking channels. However, I am confident that given time, the MSM is very well positioned to help the government achieve its objectives of creating jobs, enhancing the income of citizens, and having a better balance of Omani employees and expatriates in Oman. Besides the big family companies and government projects, we have a huge unrepresented SME sector that is playing a large role in the economy. There has to be a trickle-down effect.

What do you make of the regulatory policies of the Capital Market Authority (CMA)?

The CMA in Oman has been playing a major role in supporting the MSM. Its staff is flexible, professional, and has pioneered many initiatives in the region. The MSM and its regulatory counterpart the CMA function in sync and have over the years established themselves as successful regulatory bodies. Oman also has brokerage companies and fund management companies of sound repute in the region. Hence, we definitely have what it takes to make a good stock exchange. That being said, now the focus and the argument should change from what MSM should do to encourage trading to what brokers and the CMA should do. The question is; how can the government realize the importance of the MSM in achieving or assisting its macroeconomic objectives? We have a structural challenge here. My argument is that the government should come up with policies and incentives to encourage the private sector to set up public companies. If you analyze the history of Oman, you see that we have many publicly listed manufacturing companies. In the late 1980s, the government decided to promote the industrial sector and came up with interest-free loans and tax holidays, and supported Omani tenders. The business community was given an opportunity to benefit from all this, provided they launched a company that was 40% public. This was a successful model and was initiated before there were large numbers of business people in the country. Now, our population has grown significantly along with the number of educated people, providing a better environment for all. The government has to come up with innovative ideas to promote public companies. There are three elements to the solutions: economic policy, capital market, and economic objectives; the key is how these are interlinked.