The BSI Gained Traction this Week, Mainly Fueled by Trades on Real Estate Stocks  

The BLOM Stock Index (BSI) compiled by BLOMInvest Bank on a daily basis climbed by a solid 2.16% over the week ending July 10th 2020, noting that the Market capitalization on the Beirut Stock Exchange (BSE) grew by a marginal 1.6% to reach $6.4B on July 10th. Even though the volume of trades recorded over the week amounted to 202,332 shares, down from last week’s 1.08M, the value of total traded shares climbed by a weekly 28.6% totaling $2.9M, compared to last week’s $2.3M.

In comparison to some regional leading equity indices, the uptick in Lebanon’s BSI outweighed the 0.3% and 0.9% increases registered by the S&P AFE 40 and the S&P Pan Arab Composite Large Mid Cap Index, respectively. However, the MSCI Emerging Markets Index rose by a good 5.5% by July 10th. It is worth noting that the regional top performing equity markets were the bourses of Qatar, the KSA, Egypt (noting all 3 are within the MSCI index), in addition to the Bahrain equity market which rose by a weekly 2.5%, 2.3%, 1.8% and 1.1%, respectively, in the week ending July 10th.

On the Beirut Stock Exchange (BSE), the Real estate (RE) composed 99.5% of the BSE’s total trading value while the minimal remaining share of 0.5% was grasped by the banking sector.

In details, the real estate sector witnessed notable upticks which in fact sent Solidere share prices to all-time highs. Worthy to note that since end-October 2019, the market for real estate began its uptrend, as many depositors found a safe haven in real estate investments, namely Solidere’s, whose shares are listed on the BSE.  As such:

  • Solidere “A” increased by a weekly 5.44% to reach highs of $14.93 per share.
  • Solidere “B” shares added 7.07% to settle at a high of $15.00 per share;

Meanwhile, the minimal trading in the banking sector mainly entailed Audi Listed shares climbing by by 6.82% to $0.94 per share over the week. Meanwhile, BLOM Listed shares fell by 5.64% to $3.18 this week.

In its turn, the Blom Preferred Shares Index (BPSI) saw no change from last week, thereby closing the week at 62.69 points.

On the London Stock Exchange, only Audi GDR shares this week traded, adding 32.26% to reach $0.41 per share by July 10th 2020. It is also worthy to note that Byblos Bank announced that it will be de-listing its London GDR shares, effective July 31st 2020 (more details on this here).

The activity of the Lebanese equity market especially since October 2019 has been tightly linked to the performance of Solidere (real estate) shares. In fact, capital controls imposed since the eruption of protests have directed most investors towards real estate investments, noting that Solidere’s listed stocks alone jumped by 215% from end October to-date. The trading activity next week may bear new fruit if today’s meeting with the IMF regarding the ‘electricity file’ succeeds in helping both parties find a way forward and re-initiate constructive talks leading to needed reform action.  

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