BLOM Stock Index (BSI) in the Red as Ministers Continue to Discuss Divisive State Budget and Proposed Cuts

During the week starting May 06th 2019, Lebanon witnessed an open strike by the employees of Banque du Liban (BDL) who feared budget cuts will jeopardize their wages and benefits. The strike disrupted some operations with (and through) the central bank this week, and also triggered a suspension of trading activity on the Beirut Stock exchange (BSE) on May 06 & 07, 2019.   

Against this backdrop, the BLOM Stock Index (BSI) lost 3.72% to end the week ending May 10th at 870.43 points. Accordingly, the market capitalization fell from last week’s $8.81B to $8.48B this week. Meanwhile, the average traded volume and value of listed shares went from 76,750 shares worth $466,489 last week to 154,485 shares worth $743,304 this week.

In their turn, the regional indices registered weekly downturns with the S&P AFE 40, the S&P Pan Arab Composite Large Mid Cap, as well as the MSCI Emerging Markets Index retreating by 4.04%, 4.06% and 4.69% over the past week.

The top gainers in the Arab World’s bourses were those of Tunisia and Bahrain, which recorded the respective upticks of 0.33% and 0.16%. Meanwhile, the top losers were the stock markets of the KSA and Egypt which declined by 5.39% and 5.77%, respectively, over the week.

On the Beirut Stock Exchange (BSE), the banking sector accounted for 75.3% of the total traded value, while the real estate and industrial sectors grasped a stake of 24.05% and 0.65%, respectively.

Shares of the banking sector and real estate mainly retreated. In details, BLOM Bank’s GDR and Listed shares fell by a weekly 3.50% and 4.71% to stand at $8.00 and $8.10, respectively. Moreover, Bank Audi GDR and Listed shares declined by a weekly 4.02% and 5.53% to reach $4.30 and $4.44, respectively. Nonetheless, Byblos Listed shares rose by a weekly 2.44% to $1.26.

As for the BLOM Preferred shares Index (BPSI), it slid by 1.18% to 85.61 points, owing it to a weekly 8.80% decline in the price of Byblos Preferred 2009 shares, to $72.00.

On the London Stock Exchange, BLOM GDR shares rose by a marginal 0.63% to $8.00

In the real estate sector, both Solidere A and B shares plunged by 11.50% and 9.82% over the week, to $5.00 and $4.96, respectively, as uncertainty regarding the state budget and reform agenda persisted.

In the industrial sector, HOLCIM shares registered a weekly uptick of 1.75% to $14.50 over the week.

Activity on the BSE in the upcoming weeks will be largely reliant upon the developments of cabinet talks. The discussions among ministers are expected to continue over the weekend and the coming weeks. The focus is to resolve the divisive issue of cuts to public sector wages and employees’ retirement benefits and raise the budget to parliament for endorsement, among other needed reforms.

Leave a Reply

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