Beirut Stock Exchange takes boost from new PM
Analysts told The Daily Star that the market outlook would remain positive, unless the Cabinet formation process stalled. Solidere A and B stocks gained 4.93 and 4.56 percent Monday to reach $13.83 and $13.75, respectively.
Solidere shares A and B had edged up by 7.50 percent and 6.48 percent during Friday’s session.
BLOM Stock Index surged by 0.20 percent to close at 1,203.54 points.
Senior Investment Officer at Arab Finance Corporation Jean-Michel Aoun said though Solidere shares might gain further, reaching $15 to $16, the long-term outlook is mainly tied to the Syrian crisis.
“The gains in share prices could also be limited by some profit-taking,” he added, dismissing the possibility of Solidere’s shares rebounding to above $20 levels.
Trading value reached $4.12 million in Monday’s session with 453,088 shares traded in 218 transactions. Bank Audi shares fell 2.57 percent as Banque BEMO’s dropped 2 percent.
BSE market capitalization increased 0.44 percent to reach $11.069 billion.
Other analysts were more enthusiastic in their short-term expectations but echoed Aoun’s views that the bourse’s outlook is completely tied to politics.
“The bourse is going into a very positive direction and a Solidere stock price of $18 is definitely within reach,” said financial analyst Walid Sassia, who expects the positive outlook to continue for the coming months if Salam manages to form a Cabinet.
“Of course the BSE continues to move on the beat of political developments, and the market gains are subject to the persistence of a favorable political atmosphere in the country.”
Sassia expected that the market would continue on an upward trend for the coming 6 to 9 months, when the Parliamentary elections are expected to take place.
“Thereafter, the performance will be dependent on the results of the elections,” he said.
According to Nancy Elias, senior financial consultant at FFA Private Bank, investors have been highly anticipating the “slightest positive political developments” for the stock market to rebound.
While echoing Sassia’s positive outlook, Elias expected Solidere prices to settle at just $16.
Aoun explained: “We have not seen the trade volumes like those witnessed in 2008, following the Doha agreement. This would probably require a wider political settlement.”
Stock market activity went down strongly in the first quarter of the year.
Aggregate turnover amounted to $60.1 million, down 33.8 percent from a turnover of $90.7 million in the first quarter of 2012, figures released by the Beirut Stock Exchange last week showed.
Total trading volume declined to 9.5 million shares in the first quarter of 2013, 29.4 percent lower than last year.
Market capitalization increased by 0.5 percent from end-March 2012 to $10.9 billion. 77.9 percent were banking sector stocks, followed by real estate stocks with 18.5 percent.
The average daily trade volume for the quarter was 160,196 shares for a daily value of $1 million, 27 percent lower in volume and 31.5 percent lower in value compared to the first quarter of 2012.
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