Question

(a). Select any three major international stock exchanges which are mostly affected due to the current scenario of COVID 19, Will it create any impact on Muscat Securities Market? Give your comments on that.   

(b). Oman Metal Industries is the popular and biggest creditworthy company manufacturing and they manufacture the steel for the Asian market. They are now planning to expand their business to African countries and decided to invest in latest high tech machines for their industry. As you know the amount for purchasing the latest machines will cost more and it needed long-term finance. So the Oman Metal Industries planning to rise the capital money by issuing equity shares. It involves huge flotation of cost. To handle these kind of expenses the company planning to tap the money market.

Answer the following questions:

1. Examine the problems faced by the Oman metal Industries and recommend the solution to this problem?

Identify the name of the money market instrument used in this case and what will be the minimum and maximum duration of that instrument?

Answer 1

A) three major international stock exchanges which have been impacted due to covid-19 American stock exchange which is Dow Jones, Shanghai Stock exchange and FTSE.

yes since all global market are related, it will create an impact on Muscat securities market also and there is also a huge concern for oil, so it will be impacted.

b) I) the problem faced by Oman metal industries are regarding their capital structure problem and expanding their business to African countries and investment into high tech companies so it is trying to meet with short term financial needs with equity capital.

it is also trying to raise money through money market where securities are issued for the short-term and it would be good for the company as it will meet the maturity duration concept.