Global Equities in the Red this Week, While the Lebanese Bourse Succumbs to Security Concerns

Lebanese and foreign investors’ sentiment was shaken this week following last weekend’s bomb attack that targeted BLOM Bank’s head office. This was mainly reflected in a thinner trade volume on the Beirut Stock Exchange (BSE) during the week ending June 17, 2016. The average daily volume trade reached 110,481 shares valued $687,264 down from 122,681 shares traded daily last week with a value of $1.02M. The BLOM Stock Index (BSI) ended the week at 1,142.89 points, registering a 0.43% weekly slip and broadening its year-to-date loss to 2.28%.  As for the market capitalization, it edged down from $9.48B last week to $9.43B.

 Despite its negative performance, the BSI’s weekly slip remained slower than that of many of its peers. In fact, Brexit concerns heightened this week ahead of next week’s referendum heavily impacted regional and global equities. This was reflected by weekly losses in several regional indices such as the Morgan Stanley emerging index (MSCI) that shed 4.45%, the S&P AFE40 that lost 0.93% and the S&P Pan Arab Composite LargeMidCap Index that dropped 1.21%.

In the Arab world, all stock markets ended the week in the red. In specific, Egypt stock exchange saw the biggest loss this week after the EGX30 decreased 4.33%. This has resulted from Egypt Central Bank pushing up key interest rates (overnight deposit rate and overnight lending rate) by 100 bps to a decade high in order to curb the bolstering inflation level that followed March’s pound devaluation.

On another front, the continuing drop in global oil prices below the $49-mark per barrel took its toll on GCC stock markets this week. As a result, Dubai, Abu Dhabi and Muscat revealed respective weekly declines of 1.88%, 1.35% and 1.32%.

Lebanese banks were the main market movers this week, accounting for 76.7% of the total value traded. In details, the security development against BLOM Bank on Sunday failed to trigger down the bank’s listed shares that revealed a 1.01% weekly rise to $10.00. However, BLOM GDR lost 0.49% to $10.15; whereas Byblos listed stocks edged 1.21% up to $1.67.

As for the BLOM preferred shares index (BPSI), it inched 0.03% up to 104.19 points as the 0.2% weekly rise in the price of Audi preferred shares class “G” to $100.30 more than offset the 0.1% weekly decline in the price of Audi’s preferred “H” shares to $100.

On the London Stock Exchange, BLOM, Solidere and Audi GDRs fell 0.98%, 3.30% and 0.84% to $10.15, $9.37, and $5.90, respectively.

In the real estate sector, rumors about a possible security incident in the Downtown area of Beirut negatively impacted Solidere shares this week. Hence, the real estate company’s “A” and “B” shares decreased by 3.24% and 5.14% to $9.25 and $9.05, respectively.

Looking ahead, activity on the BSE will probably maintain the norm in the coming weeks as investors’ skepticism is expected to remain high regarding the latest terrorist attack and the potential recurrence of security incidents.

Leave a Reply

Your email address will not be published. Required fields are marked *