contacts the lebanon weekly monitor economy...

1Week 04 January 16 - January 22, 2012

JANUARY 16 - JANUARY 22, 2012

WEEK 04

Bank Audi sal - Audi Saradar Group - Group Research Department - Bank Audi Plaza - Bab Idriss - PO Box 11-2560 - Lebanon - Tel: 961 1 994 000 - email: [email protected]

CONTACTS

RESEARCH

Treasury & Capital Markets

Micky Chebli(961-1) [email protected]

Nadine Akkawi(961-1) [email protected]

Emile Shalala(961-1) [email protected]

Private Banking

Toufic Aouad(961-1) [email protected]

Corporate Banking

Khalil Debs(961-1) [email protected]

Marwan Barakat(961-1) [email protected]

Jamil Naayem(961-1) [email protected]

Salma Saad Baba(961-1) [email protected]

Fadi Kanso(961-1) [email protected]

Nathalie Ghorayeb(961-1) [email protected]

Lélia Tamer Badro(961-1) [email protected]

Nivine Turyaki(961-1) [email protected]

LEBANON MARKETS: WEEK OF JANUARY 16 - JANUARY 22, 2012

The LEBANON WEEKLY MONITOR

Economy___________________________________________________________________________p.2 ECONOMY IMPROVES IN SECOND HALF BUT GROWTH REMAINS SLOW ON THE OVERALLEconomic conditions in the second half of 2011 proved to be considerably better than those prevailing in the first half of the year.

Also in this issuep.3 Lebanese tourism at the image of regional developments p.3 Consumer prices up by 5.7% on average in 2011 p.4 Clearing activity up by a yearly 14.5% in the month of December 2011

Surveys___________________________________________________________________________p.5 HSBC FORECASTS LEBANON'S 2012 REAL GDP GROWTH AT 2.3%HSBC issued a report on the Middle East termed “Who’se at risk in 2012” in which it forecasted that Lebanon’s real GDP would grow by 2.3% in 2012, versus an estimated rate of 1.7% in 2011.

Also in this issuep.6 BMI maintains Lebanon’s 2012 growth projections at 3.2%

Corporate News___________________________________________________________________________p.7 BANK AUDI RECORDS 3.7% YEARLY GROWTH IN 2011 NET PROFITS TO US$ 365.2 MILLION Bank Audi – Audi Saradar Group announced 2011 net profits of US$ 365.2 million, up by 3.7% from 2010, despite the allocation of the profits of the Syrian and Egyptian entities (US$ 42 million) to collective provisions on consolidated level, abiding by conservative management policies.

Also in this issuep.8 QFIB acquires 15% stake in Al Rifai International Holdingp.8 KFAED to undertake the development of a road project in Lebanon

Markets In Brief___________________________________________________________________________p.9 BDL INTERVENES AS A BUYER OF THE GREEN CURRENCY SURPLUSESLebanese capital markets saw during this week an offer for the US Dollar on the FX market, a decline in the trading value and prices on the equity market, and a continuous local demand for debt papers on the Eurobond market. In details, market players converted their FC holdings into LP holdings in order to pay VAT before deadline. This was translated into a decline in the LP/US$ interbank rate to LP 1,501-LP 1,502. The Central Bank of Lebanon intervened for the first time since November 2011 as a buyer of the green currency surpluses at the lower end of its intervention bracket (LP 1,501). On the equity market, activity was slow. The total trading value was limited to US$ 2.7 million versus a weekly average of US$ 10.1 million in 2011, while the price index retreated slightly by 0.3%. On the Eurobond market, a local demand for long-term papers was observed while foreign investors remained on the sidelines. The average spread tightened by 8 bps to 321 bps due to a rise in international benchmark yields.

2Week 04 January 16- January 22, 2012


WEEK 04

ECONOMY______________________________________________________________________________ECONOMY IMPROVES IN SECOND HALF BUT GROWTH REMAINS SLOW ON THE OVERALL

Economic conditions in the second half of 2011 proved to be considerably better than those prevailing in the first half of the year. It seems that after a “no growth” in the first half, the economy reported a moderate growth in the second half as suggested by most of the country’s real sector indicators. Probably the most comprehensive of those indicators is the coincident indicator of Lebanon’s Central Bank and which had grown by merely 1.7% in the first six months of 2011 to rise to 4.6% in the four-month period extending from July to October. While no figures are so far available for the last two months of the year, it looks like growth likewise improved on the background of successful festival season at large.

On the overall, the Lebanese economy went through a considerable slowdown in 2011 but seems to have avoided a recessionary environment or a net contraction in the real economy. The coincident indicator for the first 11 months of 2011 recorded an average of 257, growing by merely 2.8% year-on-year, versus a growth of 11.0% in the first 11 months of 2010. According to IMF, real output is set to have recorded a positive growth of 1% to 2%, though slowing down considerably from the 8% trend of the previous 4 years.

The quantity theory of money likewise supports the low growth assumption in 2011. The average yearly increase in Money Supply (8.9%) was coupled with a net contraction in velocity (3.6%), leaving an average price inflation of 5.7% and a slow output growth. The breakdown over first and second halves also confirms the relative improvement in the aftermath of the cabinet formation and the renewal for BDL governor’s term. As a matter of fact, the velocity of money which mirrors the spending patterns out of the stock of money in the economy fell by 10.2% in the first half but managed to grow by 3.3% in the second half.

Lebanon's real economic growth outlook in 2012 is likely to be close to the one prevailing over the second half of 2011, i.e a relatively moderate growth. The regional turmoil is likely to continue impacting private investment confidence, with major investment decisions expected to be delayed within an overall wait and see attitude on behalf of private investors at large, while household consumption is likely to maintain its sound growth despite overall political uncertainties.

BDL COINCIDENT INDICATOR

Sources: Central Bank of Lebanon, Bank Audi's Group Research Department



WEEK 04

_____________________________________________________________________________LEBANESE TOURISM AT THE IMAGE OF REGIONAL DEVELOPMENTS

Figures released by the Ministry of Tourism pointed to a slowdown in tourism activity during 2011, following vibrant years during 2009 and 2010. In fact, the number of tourists decreased by 23.7% to reach 1,655,051 in 2011 versus 2,167,989 in 2010. This year’s decline was the first seen since 2005 and 2006, years during which Lebanon had witnessed local instabilities leading to a drop in incoming visitors by 10.9% and 6.7%, respectively.

The contraction in tourism activity in 2011 amid an unprecedented regional turmoil highlights the opportunity loss for Lebanon whereby the country was not able to capture the diverted touristic flows from a number of regional countries that witnessed unrest during the year.

The distribution of tourists by origin in 2011 indicates that the majority of visitors were from Arab countries with 35.1% of aggregate visitors. Most of them were Jordanians, accounting for 22.3% of Arab visitors and 7.8% of the total. They were followed by those of Iraqi nationality which make up practically the same shares as that of Jordanians, then came Saudi visitors which account for 19.2% of Arab visitors and 6.7% of the total. Arab tourists were followed by visitors from Europe with 29.3% of total visitors, with the majority of them being from France (26.6% of European visitors and 7.8% of total visitors), Germany (14.1% of European visitors and 4.1% of the total), and the UK (11.0% of European visitors and 3.2% of the total). European tourists were followed by visitors from Asia with 14.8%, then visitors from the Americas with 13.5%, visitors from Africa with 3.7%, and visitors from Oceania with 3.4%.

Sources: Ministry of Tourism, Bank Audi's Group Research Department

NUMBER OF TOURISTS (000S)

_____________________________________________________________________________CONSUMER PRICES UP BY 5.7% ON AVERAGE IN 2011

Figures released by the Consultation and Research Institute (CRI) indicate that the Consumer Price Index (CPI), recorded a 12-month moving average of 5.7% in 2011, against a practically equal average of 5.0% seen in 2010. Year-to-date inflation reached 4.26% in 2011 while that of 2010 was 6.18%.

The increase in the CPI witnessed in 2011 was the result of higher indices for almost all main categories, with the exception of housing, while food and beverages remained more or less stable. The highest increase was for apparel with 20.9%, followed by the rise by an almost equal 7.2% in prices of transport and telecommunication on one hand and miscellaneous goods and services on the other hand. Prices



WEEK 04

movement of educational services followed with an increase of 6.6%, then healthcare services with 5.7%, recreational services with 4.5%, durable consumer goods with 1.3%, and food and beverages with 0.9%.

Prices of apparel were driven by a rise of 39.6% in those of footwear and 13.9% in those of clothing and sewing materials. The increase in the cost of transportation and telecommunications services was solely driven by the former category which posted a rise of 7.8%. Prices of miscellaneous goods and services rose on the back of a 17.4% increase in those of jewelry and 2.3% in those of personal care. Rates for educational services edged up due to an 8.4% and 3.2% step up in tuition fees and school transportation cost which offset the 1.9% decline in prices of educational books and supplies.

The index for healthcare services was boosted by a rise in prices of the following sub-indices: 10.2% in outpatient services, 3.6% in medications and medical accessories and 0.8% in inpatient services. Within the recreational services category, tariffs for movies and restaurants were those to have driven the index upward as they increased by 5.3%. Durable consumer goods were the seventh item to have posted an increase caused by a rise in the following items: 11.6% for linens, 6.0% for kitchenware, 3.7% for cleaning products and services. Finally, prices of food and beverages were driven by an 11.1% rise in those of tobacco products, 0.6% in those of non-alcoholic beverages, and 0.4% in those food items.

Sources: Consultation and Research Institute, Bank Audi's Group Research Department

CONSUMER PRICE INDEX (12-MONTH MOVING AVERAGE)

______________________________________________________________________________CLEARING ACTIVITY UP BY A YEARLY 14.5% IN THE MONTH OF DECEMBER 2011

The value of cleared checks in the banking system, a coincident indicator of overall spending patterns in the economy, pointed to an increase in consumption levels during December 2011. In fact, total cleared check rose by a yearly 14.5% during the final month of the year, versus a decline of 2.9% in December 2010.

Bearing in mind that December is a month of holidays, the spending pattern reveals an improvement in sentiment as cleared checks rose from the same months of 2010 to reach a total of US$ 6.5 billion. A breakdown by currency shows that banks’ clearings in Lebanese Pounds amounted to LP 2,065 billion in December 2011 while those in US dollars amounted to US$ 5,093 million.

In contrast, a snapshot at clearing activity in 2011 points to lower growth rates in spending levels. A detailed look shows that clearing activity was on a downward trend between February and June 2011, and then took an upward trajectory later on to reach a full-year rise of 6.9% versus a rate of 19.6% in 2010. Overall, cleared checks in 2011 stood at US$ 72,103 million with a total of LP 21,482 billion in local currency cleared checks, and US$ 57,838 million in foreign currency cleared checks.



WEEK 04

SURVEYS_____________________________________________________________________________HSBC FORECASTS LEBANON'S 2012 REAL GDP GROWTH AT 2.3%

HSBC issued a report on the Middle East termed “Who’se at risk in 2012” in which it forecasted that Lebanon’s real GDP would grow by 2.3% in 2012, versus an estimated rate of 1.7% in 2011.

Yet, it noted that uncertainties over some neighboring countries would weigh on investors’ perception of Lebanon in 2012 and add to an already difficult climate. HSBC cited local sources indicating that the number of incoming tourists edged down by 25% since the upsurge of conflicts in surrounding countries. It signaled that such instabilities could jeopardize the principle trade route for overland goods exports.

On the domestic front, Lebanon narrowly avoided another government collapse in the fourth quarter of 2011, as per HSBC, which also noted that there is no sign that 2012 will be the year in which much needed reforms finally materialize. In fact, the 2012 budget has stalled in parliament, a fact that does not remain unusual since the government has not been able to agree on a budget since 2005. HSBC sees that the finance ministry may seek to push through some of the individual measures in the budget, such as raising VAT from 10% to 12% and increasing taxes on bank deposits, although it would be premature to factor these into our budget assumptions.

Although the aforementioned measures remain positive for the long term outlook, they risk causing some short-term difficulties, particularly for the banking sector. Alongside concerns over their large-scale investments in Syria, Lebanon’s banks have also had a slowdown in deposit growth, as well as a downgrade from Moody’s.

Sources: HSBC Global Research, Bank Audi's Group Research Department

LEBANON REAL GDP GROWTH & TRADE DEFICIT AS PER HSBC



WEEK 04

HSBC mentioned that the one thing that the cabinet was able to agree on was the legislation to open up Lebanon’s recently discovered offshore oil and gas fields for tender. The bank cited official sources from the Ministry of Energy and Water that drilling could begin this year.

If legal wrangling over ownership of the reserves are resolved, and drilling does begin as planned, the trade balance could improve significantly. Yet, the aforementioned facts remain possibilities to be looked at during 2012. Currently, HSBC is forecasting only a mild improvement in the trade deficit.______________________________________________________________________________BMI MAINTAINS LEBANON’S 2012 GROWTH PROJECTIONS AT 3.2%

Business Monitor International (BMI) issued a report in which it reiterated that Lebanon’s real GDP would rise by 3.2% in 2012 versus a rate of 1.6% in 2011. According to BMI, the 2012 anticipated economic growth remains below the 8.3% average rise witnessed between 2007 and 2010 and also significantly below the country’s potential.

The ongoing crisis in neighboring countries, coupled with local political instabilities have accentuated downside risks to the economic performance of Lebanon, as per BMI. Accordingly, the country is likely to suffer from uncertainties throughout the year as consumption, investment, and trade indicators are exhibiting a noticeable slowdown. Yet, the economy would not enter into recession despite the crisis in neighboring countries. Indeed, much of the growth prospects in 2012 would be linked to how badly the tourism sector would continue to be impacted by the regional instabilities and the global economic slowdown.

Yet, beyond 2012, the outlook for the Lebanese economy remains more positive as per BMI. In fact, average real GDP growth would reach 5.3% between 2013 and 2016. Still, growth prospects during the former mentioned period are deemed lower than the country's capabilities given the low possibilities of implementing the required reforms to address some of the most pronounced structural weaknesses in the Lebanese economy, as indicated by BMI.

In parallel, BMI signaled that the government’s failure to pass on an official budget since 2005 has been involved in controling public accounts deficit, which reached 13.5% in 2006, and has steadily declined since then. It considered that political instabilities proved to be beneficial at this level, as the failure to agree on a budget deficit has led to the government's inability of implementing any new spending plans.

BMI added that data from the Ministry of Finance revealed that during the first nine months of 2011, the budget deficit contracted while the primary surplus increased. Yet, it signaled that these published results take into account a payment from the Ministry of Telecommunications, which has not yet actually taken place. When omitting this payment from budget figures, revenues show an annual decline and the budget deficit shows a significant expansion. As a result, it said that considerable risks still linger depending on when, or if, this payment is eventually made.

BMI recommended the current government to walk a fine line between carrying through with its announced capital spending projects and ensuring that debt levels and servicing costs do not go out of control. But it expected the government to focus more on politically popular current spending measures, such as its ongoing attempts to raise the minimum wage, given that growth momentum is slowing across the board.



WEEK 04

CORPORATE NEWS_____________________________________________________________________________BANK AUDI RECORDS 3.7% YEARLY GROWTH IN 2011 NET PROFITS TO US$ 365.2 MILLION

Bank Audi – Audi Saradar Group announced 2011 net profits of US$ 365.2 million, up by 3.7% from 2010, despite the allocation of the profits of the Syrian and Egyptian entities (US$ 42 million) to collective provisions on consolidated level, abiding by conservative management policies. Total operating income increased by an annual 14.0% in 2011 to reach US$ 1.1 billion. Total operating expenses stood at US$ 458.7 million, up by 9.7% from 2010, of which staff expenses amounting to US$ 258.1 million, up by 10.2% from 2010, and other operating expenses totaling US$ 169.2 million, up by 9.7% from 2010. As such, the cost to income ratio declined from 47.3% in 2010 to 45.5% in 2011.

Consolidated assets reached US$ 28.7 billion at end-December 2011, rising by a slight 0.2% from 2010. Customer deposits amounted to US$ 24.8 billion at end-December 2011. In fact, the Bank’s deposit base in Syria contracted by close to half its level of the previous year, but the consolidated deposit base has been maintained at 2010 level, owing to relative growth at various subsidiaries, despite unfavorable domestic and external economic conditions. Net loans and advances to customers stood at US$ 8.6 billion at end-December 2011 against US$ 8.5 billion a year earlier. Gross doubtful loans continued to represent 2.9% of gross loans, with the coverage of those loans by specific loan loss provisions increasing from 72.6% at end-December 2010 to 77.3% at end-December 2011, and reaching 104% when accounting for real guarantees. Net doubtful loans to gross loans stood at 0.66% at end-December 2011, one of the lowest averages across the region. Primary liquidity placed with central banks and banks reached US$ 12.6 billion, representing 50.6% of customers’ deposits, one of the most elevated liquidity levels in the region.

Shareholders’ equity remained almost stable from 2010 to attain a total of US$ 2.4 billion in 2011. The Bank’s return on average assets maintained in 2011 its level of the previous year and which reached 1.27%, while the return on average common equity rose from 16% in 2010 to 16.4% in 2011 within the context of improved leverage.

BANK AUDI'S MAJOR FINANCIAL AGGREGATES (US$ BILLION)

Source: Bank Audi - Audi Saradar Group



WEEK 04

_____________________________________________________________________________QFIB ACQUIRES 15% STAKE IN AL RIFAI INTERNATIONAL HOLDING

Qatar First Investment Bank (QFIB) has acquired a 15% stake in Al Rifai International Holding, Lebanese manufacturer of nuts, kernels, light snacks and delicacies. QFIB did not disclose the size of the deal, which marks its first step in the food and beverage industries, as per newswires.

According to QFIB statements, Al Rifai’s wide presence in European markets offers QFIB a chance to venture into new geographical regions and an opportunity to focus more on sectors that benefit from key drivers of economic change. Through representation on the board of directors, QFIB’s team would work closely with Al Rifai management at a “strategic” level to streamline business and drive future growth of the group, according to newswires.

Al Rifai International Holding Ltd. is the holding company for the Rifai interests in the nuts and kernels and coffee sectors worldwide, with the business having doubled its revenues over the last three years due both to growth in the Lebanese market and to expansion into Europe with the establishment of a 10,000 sqm state-of-the-art manufacturing facility in Sweden, as per company releases. Its products are branded under the name of Al Rifai and Nutisal. The company owns 100% of the Nutisal and Rifai business worldwide, with the exception of the Arab Gulf and North Africa market which is operated through a joint venture arrangement with the Kuwaiti Homaizi Group.

Set up in 2009, Qatar First Investment Bank (QFIB) is the first independent, Shariah compliant investment bank, licensed by the Qatar Financial Centre Authority. Its investment strategy focuses on building a diversified portfolio of investments in sectors that are benefiting from key drivers of economic change. It concentrates on the energy (oil & gas), financial services, industrials, real estate and healthcare sectors.______________________________________________________________________________KFAED TO UNDERTAKE THE DEVELOPMENT OF A ROAD PROJECT IN LEBANON

The Kuwait Fund for Arab Economic Development (KFAED) announced that it would undertake the development of Al-Hazmiah - Sofar road which would help facilitate traffic flow and tourists' movement from Beirut to Mount Lebanon, as per newswires.

The US$ 146 million project aims at renovating two lanes and constructing sidewalks stretching 24 kilometers. At least 11 intersections and several causeways will be also built.

This project would meet the demand for domestic and international transport of passengers and goods between the cities of Beirut and the Bekaa, as well as neighboring Arab countries.

In parallel, KFAED along with the Arad Fund for Social and Economic Development would finance part of the newly launched Litani river water project's first phase.

The Lebanese government announced the launch of the first phase of the Litani river water project, which has been on hold for nearly 60 years, as per official sources.

The project's first phase is expected to cost about US$330 million and is divided into two parts with the first necessitating around US$ 200 million, 80% of which will be financed by Kuwait through the Arab Fund for Social and Economic Development, and the Kuwait Fund for Arab Economic Development.

The project aims to transport about 110 million cubic meters of water annually from the local Qaraoun dam to southern Lebanon, according to the same source. About 20 million cubic meters will be used as additional drinking water source for about 100 towns and villages, while the remaining 90 million cubic meters will be allocated for the irrigation of about 15,000 hectares of agricultural land.



WEEK 04

CAPITAL MARKETS_____________________________________________________________________________MONEY MARKET: M4 CONTRACTS BY LP 142 BILLION

The overnight rate maintained its low official level of 2.75% set by the Central Bank of Lebanon, within the context of ample local currency liquidity at hand. As to Certificates of Deposits, small subscriptions of LP 16 billion were made in the 60-day category, bringing the total subscriptions in this category to LP 176 billion since the beginning of the year 2012, while subscriptions in the 45-day category totaled LP 5 billion.

At the monetary aggregates level, figures for the week ending 5th of January 2012 released this week showed a growth in local currency deposits of LP 64 billion, as a result of a rise of LP 249 billion in LP time deposits and a drop of LP 185 billion in LP demand deposits week-on-week. Deposits in foreign currencies fell by US$ 103 million. These weekly variations compare to an average weekly increase of LP 11 billion for total LP deposits, and an average weekly rise of US$ 105 million in foreign currency deposits over the year 2011. Total money supply in its large sense (M4) contracted by LP 142 billion week-on-week, as compared to an average weekly growth of LP 175 billion in 2011.

_____________________________________________________________________________TREASURY BILLS MARKET: NOMINAL DEFICIT OF LP 322 BILLION

The latest auction’s results (January 19, 2012) showed that the average yield on the six-month category retreated slightly by one basis point to 4.49%, while the average yield on the three-month and five-year categories remained stable at 3.93% and 6.18% respectively.

On the other hand, the auction results for value date January 12th, 2011 released by the Central Bank of Lebanon showed that total subscriptions amounted to LP 237 billion and were distributed as follows: LP 42 billion in the one-year category, LP 5 billion in the two-year category, and LP 190 billion in the three-year category. These compare to maturities of LP 559 billion, resulting in a nominal deficit of LP 322 billion.

The latest monthly report released by the Association of Banks in Lebanon showed that the total outstanding Tbs portfolio amounted to LP 48,771 billion at end-November 2011 and was allocated as follows: LP 225 billion in the three-month category, LP 1,834 billion in the six-month category, LP 1,517 billion in the one-year category, LP 4,128 billion in the two-year category, LP 21,844 billion in the three-year category, LP 11,338 billion in the five-year category, LP 7,885 billion in the seven-year category.

INTEREST RATES

Source: Bloomberg



WEEK 04

TREASURY BILLS

Sources: Central Bank of Lebanon, Bloomberg

_____________________________________________________________________________STOCK MARKET: SMALL DECLINE IN PRICE INDEX OF 0.3%

The main features characterizing the Beirut Stock Exchange during this week were sluggishness and the lower investors’ appetite to add to their holdings. The total trading value was limited to US$ 2.7 million versus US$ 15.2 million in the previous week and a weekly average of US$ 10.1 million in 2011. The average daily trading value fell from US$ 3.05 million last week to US$ 0.53 million this week, which led to a drop in the trading volume index of 82.4% to 22.10. As far as prices are concerned, the BSE price index declined slightly by 0.3% to 110.00.

_____________________________________________________________________________FOREIGN EXCHANGE MARKET: LP/US$ INTERBANK RATE AT ITS LOWEST LEVEL

Depositors converted their FC holdings into LP holdings during this week to pay VAT before deadline. Within this context, the LP/US$ interbank rate hovered between LP 1,501 and LP 1,503 at the beginning of the week and reached a narrower range of LP 1,501-LP 1,502 on Friday due to increased offer for the US Dollar. Under these circumstances, the Central Bank of Lebanon intervened at the end week as a buyer of the US Dollar surpluses at the lower end of its intervention bracket (LP 1,501), noting that this is the first time since the beginning of November 2011 that it intervenes in the FX market.

The Central Bank’s latest bi-monthly balance sheet ending 15th of January 2012 showed that foreign assets rose by US$ 274 million during the first half of January to hit a new record high level of US$ 32.5 billion at mid-January. The BDL’s foreign assets covered 81.6% of LP money supply, with this coverage ratio rising to 119.6% when accounting for gold reserves estimated at US$ 15.2 billion. In addition, the Central Bank’s foreign assets covered 19.2 months of imports. These ratios reflect the BDL’s strong ability to defend the currency peg and meet demand for foreign currencies should any pressures arise.

EXCHANGE RATES

Source: Bank Audi’s Group Research Department



WEEK 04

EUROBONDS INDICATORS

Source: Bank Audi’s Group Research Department

In details, Solidere shares accounted for 22.0% of activity this week. Solidere “A” share price retreated slightly by 0.1% to US$ 14.27, and Solidere “B” share price fell by 1.6% to close at US$ 14.03. The banking shares accounted for 77.9% of the total trading value. Bank Audi’s “listed” share price edged down by 0.2% to US$ 5.70. Bank Audi’s GDR price dropped by 1.0% to US$ 5.90. BLOM “listed” share price declined by 0.4% to US$ 7.39. BLOM’s GDR price rose by 1.1% to US$ 7.38. Byblos Bank’s “listed” share price went down by 0.6% to close at US$ 1.60. As to industrial stocks, Ciments Blancs Bearer’s share price surged by 4.6% to US$ 3.40.

The Beirut Stock Exchange performed relatively similarly to other Arabian, as evidenced by a rise of 0.9% decline in the S&P Pan-Arab Composite Index. However, it performed lower than other emerging markets, a shown by a 4.1% rise in the S&P Emerging Market Composite Index.

_____________________________________________________________________________BOND MARKET: CONTINUOUS LOCAL DEMAND FOR LONG-TERM MATURITIES

The Eurobond market continued to witness a local demand for long-term maturities in moderate volumes, while foreign players were relatively absent. Bond prices remained stable week-on-week, while the average spread shrank by eight basis points to 321 basis points due to stability in Lebanese yields and a rise in international benchmark yields.

For instance, the five-year US Treasury yield rose from 0.82% last week to 0.87% this week as reports bolstered optimism in the US and German economies and borrowing costs in euro-area bond sales decreased.

As to the cost of insuring debt, Lebanon’s five-year CDS spread didn’t change week-on-week, standing at 450-480 basis points.

AUDI INDICES FOR BSE

Sources: Beirut Stock Exchange, Bank Audi’s Group Research Department



WEEK 04

INTERNATIONAL MARKET INDICATORS

Sources: Bloomberg, Bank Audi's Group Research Department

___________________________________________________________________________DISCLAIMER

The content of this publication is provided as general information only and should not be taken as an advice to invest or engage in any form of financial or commercial activity. Any action that you may take as a result of information in this publication remains your sole responsibility. None of the materials herein constitute offers or solicitations to purchase or sell securities, your investment decisions should not be made based upon the information herein.

Although Bank Audi Sal Audi Saradar Group considers the content of this publication reliable, it shall have no liability for its content and makes no warranty, representation or guarantee as to its accuracy or completeness.

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