Strengthening Liquidity: The Future of Muscat Stock Exchange
Enhancing Market Regulations
The Muscat Stock Exchange (MSX) is making significant strides to enhance its market-making obligations and streamline the onboarding process for foreign investors. These advancements aim to turn occasional trading spikes into sustainable liquidity that can support large institutional orders without causing abrupt price fluctuations. According to Haitham bin Salim al Salmi, the CEO of MSX, these initiatives are crucial for the long-term stability and growth of the market.
Key Indicators of Progress
In an exclusive discussion, al Salmi emphasized that true progress in 2026 should be evaluated using three main indicators rather than just index levels. These indicators include the depth of executable liquidity, a stable ownership structure with more long-term institutional involvement, and an increasing number of listed companies that meet international standards for size, liquidity, and free float, as outlined by MSCI and FTSE.
“Market classification isn’t achieved through fleeting performance spikes but rather through ongoing technical eligibility,” he noted, stressing that meaningful progress reflects a deeper, more stable market capable of attracting global investors.
Prioritizing Quality Liquidity
The focus on liquidity has become central to MSX’s strategy, but al Salmi pointed out that quality is just as important as quantity. He argued that deeper order books facilitate better price discovery and minimize distortions that can arise from low trading volumes.
Strengthening Market-Making Framework
To tackle these challenges, MSX has introduced an enhanced market-making framework. This includes strengthening quoting obligations, narrowing bid-ask spreads, and mandating continuous two-sided markets, even during periods of high volatility. These measures aim to ensure that there is sufficient trading depth available when investors require it most.
Broadening Capital Base and Regional Integration
Alongside these changes, MSX is actively working to expand its capital base and promote regional integration through initiatives like Tabadul. This platform aims to simplify access for foreign investors while improving banking integration. Al Salmi believes that a more diversified investor base will help stabilize the order book and contribute to “credible price formation.”
Assessing Cross-Border Connectivity
On the topic of regional connectivity, al Salmi stated that MSX plans to assess its early achievements in terms of cross-border trading flows, a noticeable increase in non-resident participation, and enhanced contributions from regional market makers toward price stability over the initial 6 to 12 months.
In 2025, trading activity linked through Tabadul reached around AED 5.6 billion (approximately RO 585 million). This figure serves as a promising benchmark, indicating the robust activity MSX aims to build upon in the future.
Shifting Towards Institutional Market Models
Al Salmi positioned these developments as part of a larger transformation towards a market model that emphasizes institutional participation. By stabilizing the investor base, MSX aims to mitigate volatility and foster a more predictable liquidity landscape. Meeting international eligibility criteria consistently remains a key objective, as this is often a prerequisite for attracting foreign investments that are benchmark-driven.
Long-Term Goals Under Oman Vision 2040
The strategic direction of MSX is fundamentally “structural,” focusing on deepening liquidity and extending market participation. These elements are essential for reinforcing the capital markets’ contribution to the national economy, aligning with Oman Vision 2040. This vision envisions a diverse and robust economic future, with stronger financial markets playing a pivotal role in its achievement.
By putting these enhancements into practice, the Muscat Stock Exchange aims not only to improve its appeal to foreign investors but also to solidify its position as a stable and sustainable marketplace conducive to economic growth.
