CMA: First Step to Developing Lebanese Capital Markets

Being the second oldest market in the MENA after the Egyptian Bourse, the Beirut Stock Exchange (BSE) was founded in 1920, by a decree of the French Commissioner. In its early years, Lebanon witnessed substantial economic activity, which translated into banking and services companies listing their stocks on the BSE. Moreover, trade was expanded to encompass shares of private companies set up under the French mandate to operate and manage some public services and sectors. This prompted the Lebanese bourse to flourish, with 50 stocks listed in the 1960s. Unfortunately, in 1975 the Lebanese Civil War erupted, hindering trade on the BSE, which was decisively halted in 1983. The Lebanese Bourse reopened in 1996. However, its trading activity was not substantial as it was before, due to the political and security uprisings that Lebanon faced, making the BSE the region’s second smallest stock exchange (in terms of market capitalization) exceeding only that of Tunisia.


After its re-launching, the BSE did not gain the momentum it had before, due to many reasons. First, almost 95% of enterprises in Lebanon are small and medium-sized family businesses. These family business’ owners are not entirely open to the idea of exposing their companies’ ownership to outsiders. Moreover, there is a lack of laws and regulations requiring compliance, transparency and disclosure. Finally, with the presence of a strong banking sector, business owners do not feel the need to go public because they receive adequate financing from banks. These shortcomings led to lack of incentives for companies to list their shares and similar reservations for investors to buy them.

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CMA First Step to Developing Lebanese Capital Markets

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