New US Sanctions on Hezbollah Dampened Optimism on a Swift Government Formation

The BLOM Stock Index (BSI) lost a weekly 0.32% this week, to reach 1,129.57 points by May 18th 2018. The market capitalization however shrank marginally from last week’s $11.16B to $11.13B this week.

An average of 102,316 shares worth $1.09M were traded on the Beirut Stock Exchange (BSE) this week, compared to 464,269 shares worth $3.19M last week.

Regionally, the MSCI Emerging Markets Index declined by a weekly 1.08%. Meanwhile, the S&P AFE 40 and the S&P Pan Arab Composite Large Mid Cap Index rose by 1.1% and 0.96%, respectively.

The bourses of Qatar, Saudi Arabia, and Dubai were this week’s top gainers adding 1.62%, 1.3%, and 1.07%, respectively. The gains were mainly driven by improved performance of energy stocks as oil prices rose following Trump’s pull-out from the landmark nuclear deal with Iran.   

Meanwhile, the market’s top losers were Egypt’s and Kuwait’s Stock Indices which closed the week in the red, retreating by 1.62% and 0.66%, respectively.

On the Beirut Stock Exchange (BSE) this week, the banking sector constituted 55.6% of the total traded value while the real estate sector grasped 44.4% of the total value.

In the banking sector, Audi Bank’s GDR shares and Audi Bank Listed shares each lost 0.17% to end the week at $5.79 and $5.74, respectively. Byblos Bank listed shares also decreased by 1.32% to $1.50. However, BEMO listed shares and BLOM listed shares recorded weekly gains of 4% and 0.91% to $1.56 and $11.10, respectively.  

As for the BLOM Preferred Shares Index (BPSI), it fell by 2.49% over the week to 101.98 points. The drop can be largely attributed to the 3.85% and 3.03% weekly drops in the shares of Bank of Beirut Pref H and Byblos Bank’s Preferred 2008 shares to $25 and $96.  Byblos Bank Preferred 2009 shares also fell by a weekly 2.44% to $96. Similarly, Audi Pref I shares and BEMO Preferred 2013 recorded respective losses of 1.51% and 0.10% to $98 and $104.60.   

On the London Stock Exchange, the GDRs of Audi Bank and Byblos Bank declined by weekly 1.74% and 1.96% to end the week at $5.65 and $75, respectively.

In the real estate sector, Solidere A shares as well as Solidere B shares recorded losses of 2.31% and 0.71% to end the week at $8.45 and $8.37, respectively.

The presiding positive environment following May 6th parliamentary elections and the first cabinet session post-election held this week were clouded by new US sanctions imposed on members of Hezbollah, which may hinder the swift formation of a government by May 21st. Moreover, the traded volume on the BSE was also low this week which may be linked to the start of the month of Ramadan. The performance of the BSE in the coming weeks will be determined by developments on cabinet formation and the second cabinet meeting scheduled for Monday May 21st.  



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