Resignation of PM Saad Hariri Sends Blom Stock Index to its Lowest Level in Two Years

The shocking resignation of Lebanon’s Prime Minister (PM) Saad Hariri last Saturday rattled the Beirut Stock Exchange over the past week.

The BLOM Stock Index (BSI) lost 3.20% to reach the level of 1,130.09 points, its lowest since November 2015.

During the week an average of 175,954 shares worth $2.01M were traded compared to 110,658 shares worth $664,196 the week before.

The market capitalization shrunk by $331.54M over the past week to reach $10.01B this Friday.

Regionally, the S&P Pan Arab Composite Large Mid Cap Index and the S&P AFE40 were also down this past week by 0.92% and 1.27%, respectively. Meanwhile, the MSCI Emerging Markets Index added a weekly 0.57%.

In the Arab world, stock markets in Dubai, Kuwait and Qatar were all in the red with weekly losses of 4.76%, 4.43% and 3.20%, respectively.

After the major “anti-corruption” sweep led by crown prince Mohamed Bin Salman against princes and high ranking Saudis, the Saudi Arabian market ended this eventful week with a minor 0.03% slide. Reuters reported that the Saudi market lost 3.1% at some point on November 7th but ended the session with only a 0.7% drop as “government-linked” funds conducted buy operations to prevent market chaos.

Meanwhile, the Tunisian and Egyptian bourses registered modest weekly gains of 0.80% and 0.22%, respectively.

On the BSE, the banking sector accounted for 63% of total traded value while the real estate and industrial sectors accounted for the remaining 34% and 3%, respectively.

In the banking sector, BLOM Bank’s GDR and listed shares slid by 8.81% and 5.84% to $11.49 and $10.97, respectively. Bank Audi’s GDR shares also declined by 3.15% to end the week at $5.85. As for Byblos Bank’s listed shares, they fell by 1.84% to stand at $1.60.

On the London Stock Exchange, BLOM Bank’s GDR shares and Bank Audi’s GDR shares fell by 5.91% and 3.45% to reach $11.95 and $5.87, respectively.

As for the BLOM Preferred Shares Index (BPSI), it barely edged up by 0.04% to reach 105.63 points as Bank of Beirut’s Preferred I shares added 0.59% to $25.65 and as Bank Audi’s Preferred G shares slid by 0.30% to $101.20.

In the real estate sector, Solidere A and B shares dropped by 7.98% and 6.52% to $7.50 and $7.60, respectively.

In the industrial sector, Holcim shares dropped by 5.33% to settle at $13.51.

The large amount of speculation surrounding the resignation of Lebanon’s PM, the date of his return to Lebanon and the political and economic ripples that are taking place are negatively impacting investors’ sentiment.

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