Beirut Stock Exchange continues its upward drive
The BLOM Stock Index continued its recent upward drive, up 1.7 percent to 615.65, again on the back of Solidere being in renewed favor.
Last Sunday’s first stage in the parliamentary elections turned out to be quite positive for opposition figures, particularly allies of Premier Rafik Hariri. The second stage, which will cover Hariri’s home turf in Beirut as well as the Bekaa and the South, is expected to be at least as positive for the opposition. Should that scenario actually transpire, and then it would be difficult for the President to deny the will of parliament if Rafik Hariri is most Deputies’ choice for Prime Minister.
What’s important in the near-term is the appointment of a cabinet that can grapple with the country’s economic problems irrespective of political interests. That is still far from certain, whether noting the former or current administration’s record on such matters.
53,055 bank shares exchanged hands this week, accounting for almost 13 percent of total bourse volume. Prices of locally listed bank stocks were unchanged, while those on the international market lost ground. Audi’s GDR was the leader among its peers, losing 3.66 percent to $18.45,clearly lower than the prices attached to the convertible feature of the bank’s new bonds. BLOM and BLC GDRs edged down by 0.21 percent and 0.36 percent to $23.450 and $6.975 respectively.
The forces pushing Solidere prices up are likely to remain in force in the coming week, as they gain momentum from the speculation of a Hariri comeback to head the next cabinet. This mere expectation is keeping, for the moment at least, Solidere prices up with no guarantee of their possible destination, whether up or down. That will depend to a large extent on who will be the new prime minister.
Solidere shares were the sole movers on the stock exchange this week, with class “A” closing at $7.125, up 1.79 percent, while “B” was 3.45 percent higher at $7.5.Demand started at relatively high levels for the “A” share, pushing the price up to as much as $7.25 on Thursday, before dropping back to $7.125 at the close on increasing supply. Demand for the “B” share exceeded rather weak supply all through the week, thus keeping the price in constant ascent. The company’s GDR was subject to the same upbeat atmosphere, as it gained 4.23 percent over the week to close at $6.775.However, the GDR is still closer to its all time low of $5.3 than to its record high of $17.725.
Market Activity Up in August
Market turnover on the Beirut Stock Exchange increased in August from the month before to 983,152 shares. The 19.31 percent rise came as a result of the hopes and anticipations ahead of the parliamentary elections. Trading volume in Solidere shares surged to 455,439 shares from 50,552.Turnover in bank shares dropped 29.4 percent to 247,497 from last month’s 350,550. The ratio of trading value to market capitalization in August was almost flat at 0.26 percent. – (Banque du Liban et d’Outre-Mer)