TBY talks to Abdullah Salim Al Salmi, Executive President of the Capital Market Authority (CMA), on risk management, sukuk, and plans for the coming year.

How is the CMA actively promoting investment, risk management, and capital formation?

The purpose of the CMA is to regulate and supervise two sectors in Oman: capital markets and insurance. By providing friendly and clear regulations that govern the capital market, we are encouraging foreign investment to come into the country. That is part of pooling capital in order to finance economic projects in Oman. We have seen good signs of that when comparing ourselves in the GCC. We have the highest amount of foreign capital market participation in the GCC; around 30% of our total capital is owned by foreign investors. We also consider ourselves the most open market in the region when it comes to ease of access of doing business and own listed securities in the exchange. On the other side, we regulate the insurance sector, which has two main functions: to insure investors and to insure the public at large. In other words, insuring belongings, businesses, and activities. We believe it is important for any economy to have an active sector that is encouraging people to invest and build assets, as well as making sure that the assets are insured against anything that may happen. The insurance market also functions as a way to pool funds, by gathering cash installments. In this regard we consider the insurance sector investors in their own right, one of the largest in the market. We do look after insurance companies to ensure they are working in a fair manner and working according to the rules and regulations set by the CMA.

What is the CMA doing to attract and retain companies in the local capital and insurance markets?

We are trying to work with the government in order to prioritize some of the companies that are government owned. As part of Tanfeedh, we have discussed and deliberated over these issues, agreeing that we need to establish a five-year plan into which we can put all government-owned companies, and afterward considering certain criteria to prioritize which companies should come first. That depends greatly on the readiness of the company to offer IPO. We are trying to work with the government in order to implement this initiative. If we manage to bring some of these companies to the public, it would enlarge their shareholder base in the market and provide new products. You cannot attract investors to your shop if we do not have a product. The other element we are working on is sukuk which is something similar to bonds. We have finished the legal framework and all of the rules and regulations are in place. The bond market is another option to encourage investors to go beyond the banking sector. We are also looking into REITs (Real Estate Investment Trusts). REITs are another element that we feel is promising. A lot of investors have huge assets here, and that huge value is locked. By adapting REITs it will encourage companies to unlock some of that value and come up with new projects.

What are the CMA's objectives for 2017-18?

As regulators, our objective is always to keep up with international standards and review our rules and regulations to be sure they are sound and acceptable. For 2017, we hope to see a new takeover code issued, and we believe that it is in the final stages. That should be published soon. We are also working on the new securities laws, a huge task that requires consultation. We have already started the consultation with the public. We have put the initial draft on our website so that the public can look at it and give their feedback; up to now, we have received a huge amount of feedback from investors. We have looked into it and conducted workshops to bring our stakeholders together and listen to them. We have planned other workshops to follow up on the incorporation of the feedback we have received so far. The second draft is ready, but now we need to gather the stakeholders again to explain it, get them to understand it, and buy into it. Then we will be talking to the government entities for final approval.