The sweeping weekend electoral victory of billionaire former prime minister Rafiq Hariri helped to stabilize the Lebanese pound Monday, an economist said. At the same time, Solidere, the giant real-estate firm in which Hariri is one of the major shareholders, shot higher on the stock market.
The Lebanese pound, which trades in a fixed range of 1,502-1,514 to the dollar, appreciated to 1,511 from 1,514 on Friday.
The pound had been under strong pressure during the recent electoral campaign, with the Central Bank of Lebanon having to intervene several times to keep it within its trading band. On Monday, however, the strong demand for dollars had subsided, and the central bank did not have to intervene.
"The first impact of Hariri's victory was felt by the national currency, which is no longer subject to the pressures" resulting from the campaign, economist Roger Melki told AFP. Hariri's possible return to power also boosted shares of the joint-stock company Solidere, the brainchild of Hariri.
Most of Solidere's projects were frozen by the government of Prime Minister Salim Hoss, and Hariri's strong showing in the polls unleashed speculation that those projects will be unblocked.
Solidere's Global Depository Receipts improved to $8.50 on Monday, a gain of 11 percent. Solidere shares also went up by 5.6 percent on the Beirut Stock Exchange to $7.50.
In contrast to Solidere, the rest of the bourse was virtually unchanged. Hariri, who had been prime minister between 1992-1998, emerged the biggest winner in legislative elections held on the past two Sundays.
He now heads a parliamentary block of at least one-third of the 128 parliamentary seats and could gather an absolute majority of votes to return to the premiership, with his pro-Syrian allies.
An open enmity with President Emile Lahoud had forced Hariri to quit his post when Lahoud took the top job in 1998. Lahoud and the outgoing government of Prime Minister Salim Hoss had repeatedly held Hariri responsible for Lebanon's economic crisis through money squandering and corruption that has raised the country's debt to what will be an estimated 25 billion dollars at the end of this year. – (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com )