Summer siesta in Beirut Stock Exchange
(Banque du Liban et d’Outre-Mer) – Local equities continued their summer slumber, although this state doesn’t appear that sensitive to the seasons of the year anymore, with a distinct lack of incentive for investors to enter the market. The bourse turnover fell to 107,646 as Lebanon Holdings seems to have achieved its share buy-back plan, which has inflated the market’s turnover over the past 2 weeks. As the market is already suffering from the difficult economic conditions prevailing in the country, news from the Ministry of Finance on the state of the public deficit discouraged local investors even more. The ministry released the June 2000 figures showing debt servicing exceeding public revenues for the first time, with the deficit spending ratio reaching 53percent in the first half of the year, well above the 2000 budget target of 36percent.These figures revived investors fears from an S&P possible downgrade which is looming in the horizon as the country is still on Credit Watch. This last threat has pushed most Lebanese GDRs listed on international markets down as foreign investors’ interest is slowly fading away. A solution to the situation seems remote for the time being as parliamentary elections are only one month away, and as the count-down for the current cabinet has started leaving all hopes of a real correction awaiting the formation of a new government.
Byblos Bank became the fourth bank to announce its interim results, which showed profits almost flat at $26.1 million compared to $26.3 million in the same period last year. This has left the share price unmoved, despite a continuous excess of demand ranging between 46,000 and 52,000 shares at each trading session. Bank of Beirut “C” remains the most active listed stock as its weekly turnover of 57,023 represented more than half overall bourse trading. Demand for the stock was in the 100,000 range for most of the week, however still unable to raise its price up from $7.563,a level its has maintained since June 16, 1999.Bank GDRs fell over the week with the sole exception of BLOM which closed steady at $22.5.
Trading in Solidere shares was its featureless self of recent weeks, as both share classes were unmoved closing at $6.75 for the class “A” and $7 for the class “B”. Lebanon’s real estate giant is severely hit by the stagnant economy and is awaiting a major shake-up of the current situation to revive it. Supply remained strong on the “A” share, fluctuating around 160,000 daily, while the “B” share was subject to a very moderate demand, peaking at 5,300 shares on Friday with supply almost completely lacking. The company’s GDR traded near its bottom for most of the week, closing on Friday 7.5percent down at $5.55.
Ciments Libanais witnessed a trade of 29,718 shares on an unchanged price of $0.438.
Car retailer RYMCO was the sole mover of the bourse this week edging up on every trading session since Wednesday to close 15.6percent higher at $2.313 on trade of 1,000 shares.