Oman spends US$389m to stabilize stock market

Oman's government said today it would set up a 150 million Omani rial (US$389.6m) market-maker fund with the private sector to help stabilize the Gulf country's bourse as the financial crisis bites. The government would provide 60 per cent of the fund, or 90m Omani rials, while the private sector and pension funds would contribute the remaining 40 per cent, it said in a statement on the bourse website. "The fund will be managed by a special administration operating on market fundamentals to provide protection from the sharp and unjustified volatility that the financial markets are being exposed to and also work towards balancing supply and demand factors in the market," the statement said. "The government hopes the creation of this fund will return confidence in the investment climate." The fund will be involved in both buying and selling shares on the Omani bourse in an effort to increase liquidity and smooth the volatility that has gripped Gulf bourses over the past two months. A trader said it was expected start operations in December. Kuwait, which has been the worst hit of the Gulf countries in the financial crisis, has had its sovereign wealth fund buy up plummeting shares for weeks in a bid to shore up stocks and confidence. On Tuesday, the government said it had asked its investment arm to set up a fund to invest in the bourse to shore up confidence after a brief halt to trading following weeks of declines. * Reuters