Oman, officially the Sultanate of Oman is an Arab country located in the south-east corner of the Arabian Peninsula occupying a total area of 309,500 sq. km. It borders the United Arab Emirates on the northwest, Saudi Arabia on the west and Yemen on the southwest. Oman has 2092 km of coastline on the Gulf, Arabian Sea and the Gulf of Oman. Its capital Muscat is located on the country’s northeastern coastline. The Sultanate is seen as a desirable place to live. Muscat is said to be the second cleanest capital city in the world and is one of the most livable.

In November 2010, the United Nations Development Program (UNDP) listed Oman as the most improved nation in last 40 years from among 135 countries worldwide. The Sultanate of Oman has been enjoying a stable political, economic and social system. Though the economy is mostly dependent on oil and gas revenue and government expenditure, the private sector is slowly emerging as a key player in the economic development of Oman. Economic diversification particularly with the establishment of manufacturing, tourism, real estate and infrastructure projects is high on the government agenda.

The Government is undertaking many development projects to modernize the economy, improve the standard of living, and become a more active player in the global marketplace. Oman became a member of the World Trade Organization in October 2000 and continues to amend its financial and commercial practices to conform to international standards.

Oman has coped well with the impact of the global financial crisis. The growth rates for 2009 and 2010 may have slowed from the boom years but the slower expansion has also eased inflationary pressures. The key challenge for the country now is to revive private sector confidence and attract new investment. Attention going into 2011 will be on the new 5-year plan, which will focus on diversification of sources of income, attracting investment, attaining good growth rates, curbing inflation, increasing spending on infrastructure projects and expanding oil & gas production. The Government has also highlighted its intention to focus on the development of small and medium-sized enterprises.

The Muscat Securities Market (MSM) was the second best performer among GCC stock markets in 2009 and ending the year to post a gain of 17.1%. MSM has room for growth, as it is limited in terms of the total number of listed companies, trading levels, market capitalization and the range of options it offers investors. As of late 2010, it had 119 listed firms. Both the market authorities and the financial industry are keen to see the MSM grow. As the majority of the private sector in Oman is not listed on the MSM, the positive developments outside are not reflected in the stock market. Market authorities need to encourage family owned businesses by offering more flexible regulations. One of the least developed areas on the MSM currently is bond trading, the market authorities would like more development in the bond market but has witnessed very little activity over the past couple of years.