Impressive inertia on the Beirut Stock Exchange
Even for midsummer, the level of inertia witnessed this week on the Beirut bourse was impressive. The BLOM Stock Index barely moved, being only 0.74 percent down on the week and level for the first three days, while volume was resolutely below 100,000 at 68,298.Of course, incentives for entering the market are somewhat thin on the ground, the firms listed are limited in their range of activities and have all, to varying degrees, been affected by the recession. Add to that highly questionable macro-economic management, and then the appeal of U.S. and European markets for local investors becomes more apparent. At present, the upcoming exercise in Lebanese democracy, in the form of parliamentary elections, has put any prospective economic initiatives on hold. Analysts are waiting to see if a government would result with the political will to take the difficult decisions necessary to remedy the country’s economic ills.
Only two banks on the local bourse displayed any sign of life, Bank of Beirut, as usual, and Banque Européenne pour le Moyen-Orient (BEMO). The former actually witnessed its first price movement since June 1999,as it rose to $7.625 before dropping back to its old level of $7.563.BEMO gained 4.3 percent to recapture its old $3 mark during a week when it was revealed that it was one of three Lebanese banks given permission by the Syrian authorities to establish an office in Syrian free trade zones, with operations restricted to within those zones. All was quiet among Lebanese bank GDRs, with BLOM being the sole mover, edging down 0.4 percent to $22.9.
A general lack of activity in Solidere shares was interrupted on Monday by trade that saw class “A” slip back further, down 1.9 percent to $6.625.Trading for both classes should remain within the current $6.5-$7 range, with a lack of any price-stimulating news around or even on the horizon. It is not expected that the new cabinet, when it is formed in early October, will be any more friendly than the current one in the absence of Rafik Hariri returning as prime minister. Solidere’s GDR did see something of a bounce-back at the end of the week, going up 11.6 percent to $6.25 from what some opportunistic buyers may have thought were oversold levels.
No industrial stock was traded this week.
Casino du Liban dropped 8.1 percent to a mid-price of $170 on the over-the- counter market, despite it having announced higher first-half 2000 and full-year 1999 profits last week. Rumors have been widespread of internal boardroom conflict at the gaming monopoly. – (Banque du Liban et d’Outre-Mer)