INVESTMENT LANDSCAPE
Oman's strategic geographic location at the junction of three of the world's largest continents and its reputation as a facilitator of peace and diplomacy have made it a magnet for investors and entrepreneurs interested in a variety of asset classes.
In 2019, we focused purely on corporate finance and investment banking, managing and making transactions mainly related to tourism, utilities, insurance, and banking. We are also working on a few IPOs, M&As, valuation and advisory services, and private investment products. We are working with a utility company with a USD250-million public offer and a private placement in tourism, which will be followed by an IPO at a later stage. The market has witnessed sizeable movement of capital from equities to fixed income and structured market. In this sense, we seek to take advantage of the interest rate differentials between Oman and other countries, since Oman is considered a safe country by investors. Oman is still a frontier market and can become an emerging one if it increases its attractiveness, starting from liquidity and increasing the depth in the market. For this reason, in the short term, it will be challenging unless the government comes up with some easing program to subsidize the interest rates of loans related to government-approved invoices and develops financing packages to assist companies in exports. The liquidity of a capital market does not depend only on profitability, but also on the degree of activity, which is why the market needs more volume, liquidity, and listings, as well as new tools to attract active investors, such as sukuk, which is still not understood by many investors. Nonetheless, it could be a good tool for asset-based operations. The central bank is keen to push back and spin off its Islamic counterparts to be standalone banks as well.
The US sanctions on Iran are severely affecting the business environment we operate in. For example, in 4Q2018, we acquired a dry warehouse in the Sohar Free Zone, and we used to have 97% occupancy. When the sanctions started, we lost around 35% of our tenants by 2019; however, business opportunities are always there: we extended the existing warehouse by adding an additional 7,000sqm of rentable space as a cold room, and we are working to capitalize on a couple of opportunities in the healthcare spectrum, especially with a focus on women, children, physiotherapy, and rehabilitation. We are willing to invest about OMR15 million to bring in a foreign operator with experience and know-how. Currently, talks are taking place with a Spanish and Italian operator who believe the population indicators are attractive in the medium to long run. Hospitality is another sector we are targeting. Oman still needs to do a lot to promote itself as a tourist destination. Oman is set to attract strategic long-term investors, but the country is not ready yet because implementing a business plan is a big challenge. The country offers an excellent location, and all the ports are working in the right direction. Ports in Oman have the potential to target different segments, and there is a significant advantage in setting up certain facilities, such as oil and gas tankers and bunkers, and benefitting from the limitations of other ports in the region.
Our primary objective is to make direct investments in infrastructure projects with attractive risk-return characteristics and stable and predictable cash flows. Quality returns are of paramount importance as our priority is to make this a defensive play for investors who have an appetite for emerging markets. Strategic investors could invest as our knowledge/technical partners and provide us with specialist management services and expertise. We are in active discussions with regional and foreign investors who are pursuing opportunities in Oman. Renewables is an area where we expect to see extensive growth, as it is more cost competitive and environmentally friendly to conventional electricity generation. Our growing demographics also requires investment in social infrastructure such as schools and healthcare institutions. Another key sector is logistics; which offers enormous opportunities because of Oman's extremely strategic geographic location. With its new leadership and Vision 2040, we expect Oman to be a more investor-friendly jurisdiction. The focus is on opportunities that can create value for investors. We will use best practices and market knowledge to harvest opportunities. Due to the COVID-19 pandemic, stable returns have become a higher priority for investors. At Rakiza, we intend to adhere closely to all core infrastructure parameters.
INVESTMENT LANDSCAPE
TABLE OF CONTENTS
Focus: Future foreign policy
Friends to all, enemy to none
In championing the late Sultan Qaboos' non-interference foreign policy, the new ruler of Oman, Sultan Haitham bin Tariq Al Said, is determined to work for friendship and peace, justice and harmony, and coexistence and positive constructive dialogue.
read articleInterview
David Kalife, CEO, Oman Oil Marketing Company (OOMCO)
Despite Oman's fuel market slowing down, OOMCO increased its sales volume of lubricants by 36% in 2019 and is constructing a greenfield bunker terminal at the Port of Duqm. The company has transformed while growing its expertise in Marketing and Digital.
read articleInterview
Azzan Al Busaidi, CEO, Ithraa
Azzan Al Busaidi is an expert in competitiveness and economic growth. He was appointed CEO of Ithraa in 2019 after 17 years spent covering managerial roles in the organization. Al Busaidi was previously Ithraa's director general of planning and studies and is a strong advocate of the potential of digitization. He holds an MBA from the University of Strathclyde and a BSc in Economics from Sultan Qaboos University.
read articleInterview
Qais bin Mohammed Al Yousef, Minister of Commerce, Industry & Investment Promotion & Former Chairman, Oman Chamber of Commerce and Industry
Private Omani companies will be able to benefit greatly from the Fourth Industrial Revolution by enhancing their local value-added strategies and upskilling the workforce.
read articleInterview
Tahir Bin Salim Bin Abdullah Al Amri, Executive President, Central Bank of Oman (CBO)
The Central Bank of Oman's job is to ensure there is adequate liquidity in the system and that banks remain robust and resilient to meet the credit requirements of all segments without undermining financial stability.
read articleB2B
Capital markets
CMA and MSM are supporting Vision 2040 by providing financing to government companies that intend to go public, financing expansion of existing and new IPOs, and widening the investors base in Oman by enhancing and developing the investment funds and insurance industries.
read articleInterview
Khalid Al Balushi, CEO, Khazaen Economic City
International investors and business owners can benefit from Khazaen Economic City's strategic location and its close proximity to the main gateways of the country to import, process, manufacture, distribute locally, and export their goods and services.
read articleFocus: Port 4.0
Destined for greatness
Investments in world-class infrastructure have generated huge rewards for Oman. The goal now is to leverage technology as a disruptive enabler, build human capacity across the public and private logistics sectors, and drive operational efficiencies to build an integrated logistics business environment that is benchmarked against the world's best.
read articleFocus: Gap in tourism services
All bases covered
An amalgamation of local companies and unique experiences in Oman has created an original flavor that is further differentiating Oman's tourism offering from other countries and in the process attracting scores of tourists from all across the world.
read articleB2B
Engineering design
Renardet Engineering Consultants and Design Unit Engineering are recognized experts in their fields. While the former is an international company strongly committed to excellent engineering consultancy services and environmental practices, the latter is an Oman-based team of architects and engineers that incorporates local culture and traditions.
read articleB2B
Construction materials
Oman's construction sector is facing a host of challenges, but Hempel Paints and Al Maha Ceramics are confident that a mix of forward-thinking business models, unique products, and strong government initiatives will help them through turbulent times and generate positive returns in the long run.
read articleInterview
Salim Razvi, CEO, Oman Academic Accreditation Authority (OAAA)
Focusing on higher education institutional accreditation, program accreditation, and the updating and maintaining of the Oman Qualifications Framework, OAAA is helping further advance higher education in the Sultanate.
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