IMPACT OF FINANCIAL CRISIS ON STOCK PRICES OF COMPANIES IN OMAN

This research paper aim to examine the impact of financial crisis on stock prices in relation with financial performance of companies, listed at Muscat Securities Market in Oman. For accomplishment of this objective, performance of services sector companies from MSM 30 index were examined by analyzing their quarterly data from January 2005 till December 2012, for the possible change in relationship between stock prices and financial performance. Sales, gross profit, net profit, earning per share (EPS), return on equity, return on assets, gross profit margin and average share price were taken as variables for study, and predictive regression modelswere developed to analyze the change in relationship between stock prices and financial performance, possibly due to financial crisis. In the regression model the share price was taken as dependent variable and other variables as independent. It was expected from this study that companies in Oman will be affected by the global financial crisis, since the global economy is integrated and interrelated; and the sultanate has free international trade with other countries. The results confirmed this. However the extent of variation is another area of research opened up by this research.