The BSI Up This Week Despite the Government Deadlock

The BLOM Stock Index (BSI) compiled by BLOMInvest Bank on a daily basis rose weekly by 2.08% to reach 614.31 by the week ending October 9, 2020 and the Market capitalization on the Beirut Stock Exchange (BSE) increased by 2.08% to reach $6.29B on October 9. Moreover, the average volume and value of trades this week totaled 30,379 shares worth $264,524 traded, compared to 81,804  shares worth $1.18M traded last week.

Regionally, the major Arab markets witnessed a positive activity this week. In details, the MSCI Emerging Markets Index, S&P AFE 40 Index and the S&P Pan Arab Composite Large Mid Cap Index rose by 3%, 1.79% and 1.75%, respectively.

In the Arab World, the bourses of Kuwait, Bahrian and KSA were the week’s top gainers rising by 5.85%, 1.81% and 1.42%, respectively. Meanwhile the bourse of UAE was the week’s top loser retreating by 2.27%. In fact, the shareholders of one of the Middle East’s largest contractors, Arabtec, have voted to pursue liquidation following a loss of US$213M in the first half of 2020. In details, the failure to diversify, along with a series of senior management changes, small operating margins in the Middle East and the impact of Covid-19 have all contributed to the failure of the company. The liquidation, likely to lead to further layoffs in a company which had a 40,000 strong workforce at the end of last year, marks the end of an era of plentiful construction for local contractors.

On the Beirut Stock Exchange (BSE), Lebanon’s real estate sector grasped the lion’s share of the BSE’s trading value with a stake of 68.16%. The banking and industrial sectors grasped the remaining share of 30% and 1.75%, respectively. The most noteworthy trades throughout the week included:

  • Solidere “A” shares, which rose by a weekly 4.14% to $15.59/share.
  • Solidere “B” shares rose by 3.40% to $15.50
  • HOLCIM shares rose by 0.47% to $12.77
  • Byblos Bank Listed shares rose by 11.11% to $0.40.
  • Audi Listed Shares rose by 3.96% to $1.05

As for the BLOM Preferred Shares Index (BPSI), it dropped  this week and reached 48.75 points due to the 45.65% weekly  decline in Bemo Preferred 2013 to reach $50.

On the London Stock Exchange, Audi and BLOM GDR shares retreated by 26.19% and 29.41% this week to reached $0.31 and $1.20, respectively.

The BSI is still driven by small opportunistic trades and nothing major. Given the prolonged government deadlock , this may carry unfortunately to the end of the year.

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