Lebanese Bourse’s Performance dependent on Government Formation

The BLOM Stock Index (BSI) recorded a 0.46% increase by to reach 984.48 points over the last week. The market capitalization rose from $9.52B, last week, to $9.57B this week.

On average, 411,163 shares worth $2.55M were traded on the BSE last week compared to 164,988 shares worth $1.36M in the week ending October 19.

Regionally, during the  week, the S&P AFE 40, and the S&P Pan Arab Composite Large Mid Cap Index recorded respective rises of 1.73% and 2.23% while the MSCI Emerging Markets Index witnessed a downtick of 0.17%.

In the Arab world, the bourses of Bahrain and UAE rose by 0.78% and 0.64%, respectively while the bourses of Egypt, Kuwait and Saudi Arabia dropped by  1.24% , 0.15% and 0.13%, respectively .

The Saudi Arabian market has been witnessing volatility during the week since journalist Jamal Khashoggi a U.S. resident, went missing on Oct 2 after visiting the Saudi consulate in Istanbul. U.S. President Donald Trump warned of severe consequences if it is found that Khashoggi was killed in the consulate.

On the London Stock Exchange, the GDR shares of BLOM Bank and Audi witnessed a drop of 1.60% and 1.61% over the week, to $9.25 and $4.90 ,respectively .

On the Beirut Stock Exchange (BSE), the Banking sector grasped 66.06% of the total trading value, while the real estate and manufacturing  sectors grasped 33.05% and 0.89% respectively.

In the banking sector, during the last week, BLOM GDRs shares and BLOM listed shares decreased by a similar 2.63%  to reach $9.25 each,. Moreover, Audi listed shares also declined by a weekly 2.20% to $4.89 .

As for the BLOM Preferred shares Index (BPSI), it recorded a loss of 1.39%, thereby ending the week at 87.13 points. In details, the downtick over the past week is attributed to the 11.66% decline in Byblos Preferred 09 price to $75.

In the real estate sector, Solidere A and B shares continued to recover and witnessed respective large increases of 16.03% and 15.54% to stand at $7.02 and $6.99, respectively, as news about an imminent government have been spread out. Moreover, in the manufacturing sector, HOLCIM registered a weekly rise of 6.53% to $17.95.

The Beirut Stock Exchange has started its recovery after the news on potential formation of a new government. Hence, gains on Lebanese stocks after the formation might not be as large as expected. However, the market may continue its upward trend if new government comprises ministers’ names that inspire confidence. Moreover, the authorities must work on improving the business environment and on the reform agenda to gain back investors’ trust.

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