BLOM Stock Index Continued its Recent Ascent

The Lebanese stock market maintained its upward momentum over the past two weeks and past the Eid Al Fitr break. The momentum was translated into a 0.47% gain in the BLOM Stock Index (BSI) since the beginning of the month, closing at 1,156.44 points. The past two weeks were also characterized by increased trading activity, rather than simply higher prices. In details, both average traded volumes and values rose from 71,131 and $578,306 to 256,944 and $1.26M. Meanwhile, the BSI’s market cap moved from $9.50B on July 1st to $9.55B on Friday.

Despite its gains over the past two weeks, the BSI still managed to lag behind its regional peers, as the S&P Pan Arab Composite LargeMidCap, the Morgan Stanley Emerging Markets Index (MSCI) and the S&P AFE 40 each registered respective gains of 2.80%, 3.82% and 2.96%, respectively.

The Lebanese bourse also recognized the most meagre gains when compared to the remaining Arab bourses. In this regard, the two standout stock markets were the Egyptian and the Qatari exchanges, realizing respective increases of 9.23% and 5.50% over the past two weeks. The governor of the Central Bank of Egypt was the driving force behind gains in the EGX 30, as he hinted towards a further devaluation of the Egyptian pound. Meanwhile, the Qatar Stock Exchange was driven by positive Q2 financial results in the banking sector.

Lebanese banks captured a majority 92.77% of total traded volume over the past two weeks, with trades on Holcim common shares on July 12th accounting for a slim 0.04% of the period’s trading and the real estate sector capturing the remaining 7.19%.

In the banking sector, BLOM Bank and Byblos Bank common shares registered increases of 0.40% and 0.61% to respective prices of $9.95 and $1.64, respectively.

Meanwhile, the BLOM Preferred Shares Index (BPSI) remained at its previous level, moving up by a single basis point to 104.26 points on the back of a 0.10% inching up in the closing price of Byblos bank preferred shares 2008 to $100.30.

Real estate stocks positively contributed to the index’s performance during the week, as Solidere class “A” shares rose by 3.42% to $9.69, more than offsetting the 0.11% dip in Solidere class “B” shares to $9.47 over the same period.

On the London Stock Exchange, Solidere GDRs were the only Global Depository Receipts to register a change in value, gaining 0.84% to $9.58.

The index’s performance going forward may depend on the anticipated releases of H1 earnings of the Lebanese banks, in addition to any potential political revelations and how the market interprets them. Volatile market conditions in Europe and the U.S may result in the direction of equity investments towards the Arab World, so regional equities may be ready for a continuation of recent results.

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