OIB engineers a drop in its own share price

Oman International Bank (OIB), recently made a series of press and market announcements that resulted in a sharp drop in their stock price, followed by a small correction. Question: were the announcements deliberately designed to bring the price down (market manipulation) or were they honestly incompetent fumbles from a bank that lost its way for good? Is the market investigating this?

The evidence:

27/12/06: Oman International Bank (S.A.O.G.) has announced that the estimated results as of December 2006 indicate profitability in excess of 31 % of paid up capital and this reaches a level of more than the profits achieved last year. Based on this we estimate the Net Profit to be RO 23.398mn compared to RO 22.028mn up by 6.2%. The EPS works out to be RO 0.310. Based on these results and the closing price of RO 3.403 (on 26/12/2006) the PE 10.98x 2006 estimates.

15/1/07: OIB share price at RO. 3.6.

28/1/07: The BOD of OIB announced that it proposes to distribute only 3% cash dividend and 32.5% stock dividend after the approval of CBO and the shareholders. Therefore, the bank will be the largest in the Sultanate in term of capital as it will reach to RO 100mn. However considering that the bank's return on equity has been stagnant, this isn't good news for shareholders. No confirmation of net profit figures is given. Brokers explain that it must be because the December guidance was accurate. They call customers who are holding OIB shares advising them to sell. OIB share price now at RO. 3.45

29/1/07: Oman International Bank has announced their results for FY 2006 ending 31st December 2006, showed a net profit of RO 27.185mn compared to RO 22.028mn for FY 2005; up by 23.4%. No explanation is given on why it is so much higher than previously announced. Instead of climbing, the stock falls 6.8% OIB share price now at 3.22.

12/2/07: OIB share price now at 3.01 sometimes dipping below 3 during day trading.

February 24. 2007: OIB announces that its board met and "recommended the distribution of 21 per cent as cash dividend and 10 per cent as stock dividend to it's shareholders". No mention anywhere that this contradicts a previous announcement.

February 26, 2007: OIB share price at 3.27

Question 2: Who benefited from the above?

Back online

Being offline wasn't all bad, after all. In the three weeks that I've been without a full time internet connection, I managed to read a couple of books, watch quite a few movies, finish a lot of things with the house, and we went to Cairo for a short 6 day holiday (well holiday for me, my wife was actually there for work).

More on all that later.

I haven't checked except my most essential email since the end of January, and I haven't read a single blog in three weeks. And never once did I get the urge to go to an internet cafe to surf the net. It's been quite liberating, really.

Off-line

We've been offline here at home since Saturday. I've been a bit busy and it didn't bother me. By Monday we figured out that it was not Omantel's problem but our ADSL modem had died. It's the second Belkin 54G modem we go through in the past two years. These Belkin all in one modems/routers/access points are crap. Their range sucks compared to D-Link and others, and I don't know anyone else who's going through modems like we are. Anyhow, we had a replacement brought in the same night and it wouldn't connect with the access points we have in the house. So my dad has a perfectly fine internet connection in his room but we have no access unless we bring our laptops to within his access point's range- which is something I didn't do till today. I have a week's unread email filling up my mail box. I check my gmail on my phone but I can't access anything with attachments and I can't reply to anything. And I catch up with blogs through Google Reader at work, which is still not blocked by our evil WebSense filter, but I can only read their RSS feeds without replying or commenting.