GCC Countries Possibly Out of The Recession Equation

This week, the BLOM Stock Index (BSI) compiled by BLOMInvest Bank on a daily basis recorded a decrease by 0.58% to reach 1,433.204 on July 08, 2022. The Market capitalization on the Beirut Stock Exchange (BSE) contracted weekly from $14.73B to $14.64B. The average volume and value of trades also totaled 36,442 shares worth $2,116,043 compared to 96,989 shares worth $5,449,491 last week.

In the Arab region, the June readings of the Purchasing managers’ index PMI remained consistently above the expansionary 50 mark threshold. Saudi Arabia’s PMI recorded an 8 month high of 57; the UAE had 54.8 as PMI readings while Qatar recorded 67.5 for June PMI. Despite the strong PMI readings, speed of the growth would remain subject to the repercussions of the war in Ukraine and would follow global economic slowdown. Nevertheless, strong economic growth in the GCC countries is expected to be maintained for the second half of 2022 as higher oil prices would drive public and private investment in the MENA region.

In more details, major Arab bourses recorded a weaker performance as global oil prices dropped this week. As such, the S&P Pan Arab, the S&P AFE 40, and MSIC decreased 1.27%, 1.10%, and 0.63%, respectively compared to last week. Moreover, Bourse of Bahrain and Tunisia added 1.78% and 0.44%, respectively by the end of this week while Egypt, UAE, and Morocco decreased by 5% and 3.55%, 3.19%, respectively.

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 99.69%, while banking sector grasped the rest of 0.31%. The most noteworthy trades throughout the mentioned period included:

• Solidere (A) shares decreased by 1.12% to settle at $62.05/share
• Solidere (B) shares added 1.05% to settle at $62.60/share
• BLOM GDR increased by 0.81% to settle at $2.50/share
• Audi (GDR) slumped by 19.60% to settle at $1.60/share
• Audi Listed shares plunged by 1.33% to settle at $1.48/share

As for the BLOM Preferred Shares Index (BPSI), no major changes were recorded as the index stood at 40.66 by the end of this week.

Lebanon is home for the oldest exchange market platform; however it is one of the smallest globally and includes very limited trade volume making it is therefore sensitive to any fluctuation among its listed shares. As such, the BSI decreased this week as Real Estate Stocks altered and ended by pushing the index down. We believe that the capital market in Lebanon would expand in the future term as economy needs wider diversification other than the tradition lending from the local banks.