An uphill battle: Political situation in Lebanon hindering BSE activity

Published January 13th, 2016 - 01:30 GMT

Beirut Stock Exchange continued its downhill slide in 2015 as more investors shy away from the Lebanese stocks. According to figures released by the BSE, total trading volume reached 74,636,997 shares in 2015, constituting a decrease of 22.9 percent from 96,790,298 shares traded in 2014.

As for the total value of traded stocks in 2015, it amounted to $629 million, down by 4.9 percent from a turnover of $661.4 million last year.

The overall performance of Beirut’s bourse usually reflects the mood of the shareholders in particular and the state of the economy in general.

Experts say that the bourse reacts to domestic developments rather than international events and the activity of global markets.

The failure to elect a president of the republic and the persisting political rift have not only discouraged investors from buying new stocks but induced them to sell their shares at lower prices.

Brokers stress that the election of the president and the resumption of Cabinet sessions would definitely have a positive impact on the BSE.

Market capitalization was nearly unchanged from the end of December 2014 at $11.2 billion, with banking stocks accounting for 80.6 percent of the total, followed by real estate shares (16.3 percent), industrial firms (2.8 percent) and trading stocks (0.3 percent).

The market liquidity ratio was 5.6 percent last year, compared to 5.9 percent in 2014.

Banking stocks accounted for 89.1 percent of total trading volume in 2015, followed by real estate equities with 10.4 percent, industrial shares with 0.4 percent and trading stocks with 0.1 percent.

Also, banking stocks represented 85.8 percent of the aggregate value of shares traded, followed by real estate equities with 13.4 percent and industrial stocks with 0.7 percent.

The average daily traded volume for the period was 309,697 shares for an average daily value of $2.6 million. The figures reflect decreases of 21.3 percent in volume and of 2.9 percent in value year-on-year. In parallel, the Market Value-Weighted Index for stocks traded on the BSE decreased by 6.5 percent in 2015, while the Banks Market Value-Weighted Index improved by 1 percent last year.

Activity on the BSE was rather subdued during the month of December 2015 in the absence of any particular block trades and amid the various holidays in the last two weeks of the year.

Value traded on the BSE fell to $32.07 million in December, down from $58.00 million a month earlier, with volume traded easing to just below 4.16 million shares, from around 5.99 million shares in November.


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