Solidere Stocks Fluctuate Pushing BSI Down to 946.031

10/12/20213/12/2021% Change
BLOM Stock Index         946.031          997.694-5.18%
Average Traded Volume           56,737            59,888-5.26%
Average Traded Value         937,131          582,17660.97%

This week, the BLOM Stock Index (BSI) compiled by BLOMInvest Bank on a daily basis significantly decreased by 5.18 % reaching 946.031 on December 10, 2021. The Market capitalization on the Beirut Stock Exchange (BSE) witnessed a decrease from $10.23B to $9.69B. The average volume and value of trades also totaled 56,737 shares worth $937,131 compared to 59,888 shares worth $582,176 last week.

This week, the most rolling news is the amendment of the circular 151 issued by the Central Bank enabling the bank customers to withdraw their bank dollar at the exchange rate of 8,000 LBP instead of 3,900LBP. This modification may be implemented today to serve the governor’s intention to ease people’s liquidity restraints as well as eventually unify the multiple exchange rates in Lebanon. However, this modification would equally increase money in circulation to some degree and probably causing further deterioration for the Lebanese pound. Moreover, at the beginning of this month, the Economic and Social Council along with some local reporters launched a media campaign so-called “Give Lebanon a Break” that is prompted by the continuous governmental paralysis and has the purpose of letting the Lebanese celebrating the festive season peacefully.

Regionally, the major Arab markets witnessed a better performance this week. The S&P AFE 40, the S&P Pan Arab, and MSCI index all increased weekly by 1.24%, 1.12% and 0.93%, respectively. Moreover, in the Arab World, the bourse of UAE and Bahrain, and Kuwait were the top gainer this week, and witnessed an increase by 4.99%, 2.12%, and 1.49%, respectively. Meanwhile, least gainer was Tunisia with a drop of 1.06% for this week.

Overall for the Gulf countries this week, Saudi Arabia and Oman opened the first direct land crossing road which would contribute to the integration of supply chains. Moreover, Saudi Arabia’s public Investment Fund affirmed investing $5M in Oman. Concerning UAE, it announced this week adopting a new work-week schedule of 4 and half days to be in line with western schedules and to enhance its global competitiveness across economic and industry sectors. Lastly, the UAE’s PMI climbed from 55.7 in October to 55.9 in November, the highest reading since June 2019 as the rise in business activities was supported by a remarkable acceleration in output and new business volumes, and the positive vibes from the Dubai Expo 2020.

On the Beirut Stock Exchange (BSE), the real estate sector grasped the lion’s share of the BSE’s trading value with a stake of 96%, while banking and the industrial sectors grasped the rest with stakes of 3.99% and 0.02%, respectively. The most noteworthy trades throughout the mentioned period included:

  • Solidere (A) shares retreated by 11.77% to $27.22/share
  • Solidere (B) shares decreased by 11.07% to $26.84/share
  • HOLCIM went down by 1.25% to $19.75/share
  • BLOM (GDR) slumped by 0.51% to $3.90/share
  • Audi (GDR) jumped 9.76% to $2.25/share
  • Audi added 3% to $2.40/share
  • Byblos decreased by 2.33% to $0.84/share
  • BEMO surged by 5.77% to $1.10/share

As for the BLOM Preferred Shares Index (BPSI), it remains the same at 44.99 by the end of this week.

This week, the BSE showed a remarkable decrease backed by a significant drop in the prices of Solidere’s shares. In more details, Solidere A share recorded a downfall of 11.77% while Solidere B registered a drop of 11.07%. Undoubtedly, Solidere is the only option available on the stock market with a real tangible underlining asset; however this week drops could be justified by the adjustment of exchange rate that must have generated some positivity in investors’ portfolio in favor of more dollars. Moreover, as the shares are not a very liquid stock and small volumes could notably affect prices, it is not market wise to see their stock declining given that the company has a fair value which can be twice as much as its current price based on the company’s fundamentals.

Leave a Reply

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