Oman expects to meet the requirements for an upgrade to emerging market status by index provider FTSE Russell, aided by a trio of upcoming listings, the head of Muscat Stock Exchange said.
MSX was added to FTSE Russell's watchlist last month for possible reclassification from frontier market status, which could lift foreign investor interest and passive fund inflows.
"We are not upgraded yet, but we're quite certain that we will meet the upgrade requirement," MSX CEO Haitham Salim al-Salmi told Reuters.
An upgrade would mark a significant step in efforts to deepen Oman's capital markets, a long-standing challenge for smaller Gulf exchanges competing for international capital.
Al-Salmi said July's listing of Oman India Fertiliser Company (OMIFCO) and a secondary listing of Asyad Shipping should help Oman meet FTSE Russell's quantitative thresholds.
The MSX chief is also expecting three IPOs next year of firms currently controlled by the state-owned Oman Investment Authority. He declined to name the likely firms, but said one would be in the telecoms sector and another an energy utility.
Oman expects to get the status upgrade green light when FTSE Russell gives its next update in April and for the reclassification to take full effect five to six months later.
"We are talking about October 2027," he said, adding that an upgrade by rival index provider MSCI was "a longer story".
"We need to get the company ready and then we need a one-year track record and then two years on the watchlist because they have different criteria. So we're talking about the journey of four years minimum," al-Salmi said.
MSX also aims to launch its first exchange-traded fund before year-end and futures and derivatives trading by 2028, either on a stand-alone basis or through a tie-up with Dubai's Gulf Mercantile Exchange.
Al-Salmi said MSX is also preparing for its own listing by finalising a new group structure, encompassing the exchange, central securities depository, clearing house and an IT unit.
"We are trying to enhance our bottom lines, so we will be ready for listing in five years," he said.
In the meantime, improving liquidity remains central to attracting international investors.
Oman's southern coastline is outside the Iran war's central chokepoint, the Strait of Hormuz. That has helped the stock market rise nearly 25% this year. July's OMIFCO IPO also saw strong demand after a surge in fertiliser prices.
Foreign investors account for around 19% of MSX trading activity, which is up compared with last year, al-Salmi added. MSX could also consider Friday trading similar to Dubai, although it would only happen if foreign participation rose substantially.
"If we see the foreign participation going to somewhere around 40% to 50%, then this could be considered," he said.
