Oman: Selected Issues

International Monetary Fund

No 2025/014, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper reviews the experiences of other emerging markets in developing local capital markets, and describes the challenges faced in the development of such markets. Efforts are ongoing to develop the local currency bond market, supported by IMF technical assistance. Initiatives are underway to enhance access to the domestic equity market and increase its depth and liquidity. Still underdeveloped debt markets and systemic excess liquidity have driven a hold-to-maturity culture among investors, as several of the preconditions for liquid secondary markets are not met. Improving the government debt issuance strategy would enhance overall transparency and help increase secondary market liquidity. The review shows establishing a functioning money and local currency bond market remains a critical first step in successful capital markets' development, while several policy tools beyond tax incentives can be employed to support participation in local markets. Increasing the presence of life insurance companies and reducing information asymmetries would help spur demand from a broader set of institutional investors.

Keywords: capital markets incentives program; private sector employment; employment growth; SME growth; development in Oman; Digitalization; Capital markets; Stock markets; Securities markets; Global; South Asia; Caribbean (search for similar items in EconPapers)
Pages: 53
Date: 2025-01-22
New Economics Papers: this item is included in nep-fdg and nep-isf
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