ONE STEP AT A TIME

Oman 2016 | FINANCE | INTERVIEW

TBY talks to HE Abdullah Salim Abdullah Al Salmi, Executive President of the Capital Market Authority (CMA), on recent trends, the importance of capital markets, and why market integration is imperative for the further development of the region.

HE Abdullah Salim Abdullah Al Salmi
BIOGRAPHY
HE Abdullah Salim Abdullah Al Salmi has been the Executive President of Capital Market Authority since 2012. He had been the Executive Vice President of CMA since 1999. Prior to joining the Capital Market Authority, He was the Director of Company Affairs Department at the Ministry of Commerce & Industry. In 1997, He served as the Secretary of Commercial Registration at the Ministry of Commerce & Industry and in 1991, He was the Director of Internal Trade Department of the Ministry of Commerce & Industry. He is the Founding member and board member of the German University of Technology in Oman (GUtech). He also served as the Chairman of the board of Oman Investment Corporation SAOC since its inception in 2005 until 2010 and Chairman of the Muscat Securities Market (MSM) from 2002 to 2008.

What are some of the latest developments taking place in the CMA?

It is essential as a regulatory authority to continually review existing rules and regulations. Our intention is to protect investors in the capital market and policyholders, with regards to the insurance sector. We are members of IOSCO and IAIAS, the global regulatory bodies for capital markets and insurance respectively, and operate in compliance with their principles and requirements. We work hard to make sure players in both markets comply with the rules, regulations, and international best practices that we have adopted. We have been working to amend the capital market law, to facilitate investigation of any wrongdoing in the capital markets. We have also been working on the takaful law, now in its final stage, which will ensure it is compliant with necessary requirements. In regard to SMEs, we are working to find a platform for these companies to assist them not only in raising funds for operations, but also to give them supervisory assurance and other support, thereby increasing their credibility, and ease of doing business with potential clients and third parties. We hope to integrate SMEs into the Muscat Securities Market, not merely as special or separate exchanges, and to create more activity. We have also been working to enhance and develop our corporate governance code, even though we were the first country in the Middle East to introduce a corporate governance code in 2002.

Is there a mechanism in place to facilitate cooperation among GCC markets? What would better integrate regional markets?

The Supreme Council of the GCC has resolved to integrate the GCC market. A committee has been formed consisting of the presidents and CEOs of the capital regulators in the GCC, and we meet regularly to discuss the issues. We have been trying to unify and bring rules and regulations closer to each other in order to ease integration and collaboration. It is challenging, but working nonetheless, and we are moving slowly but steadily towards integration. We also need unified or similar regulations. Second, when it comes to operations, it is important to have proper infrastructure for these exchanges to integrate. Also, we need a central clearing house in the GCC. This will take some time, but progress is being made.

Looking internally, what is the mechanism in place for utilizing capital markets in funding economic projects in Oman?

This is a vital issue, and indeed, one of the roles of the capital markets is to finance large economic projects. These kinds of projects are needed in Oman in order to grow and diversify the economy, to move away from a dependence on oil and gas, and to create jobs for Omanis. The main instrument to finance such projects is the capital market. Funding from investors can be channeled through the capital market in order to finance these projects. This is the central role of the capital market, and is a key part of our strategy for the coming years—to focus intently on activating and enabling the capital market to play its natural role in the national economy.

What are your expectations for the CMA for the coming year?

My expectation for the capital market and insurance sectors is for the capital market to assume a fuller role in the economy. In terms of the total capitalization of the market we are talking about 30% of GDP. There is still considerable room for us to grow, although we will need to further activate the capital market in order to better serve the national economy. In the insurance sector, a major component is motor insurance, which is mandatory. We need to make people more aware of the importance of life insurance and how the savings are to their benefit. Having more people using and benefitting from insurance products will also add to the pool of insurance funds, and the capital will help finance a good portion of the economy. Overall, we are working to make sure the capital and insurance market is credible, liquid, stable, and thus attractive.