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EconomicResearchUnitCreditLibanaisHeadquarters
AdliehBeirut,[email protected]
CREDIT LIBANAIS S.A.L.
WeeklyMarketWatch
IssueNo.592
March17th–March23rd2018
LLEEBBAANNOONN NEWS
ECONOMIC INSIGHTS
> BEIRUT RANKS 181ST IN THE WORLD IN THE 2018 QUALITY OF LIVING INDEX 1
> LIFE PREMIUM COLLECTIONS IN THE LEBANESE INSURANCE SECTOR UP BY 4.35% IN 2017 2
> MOODY’S CONSIDERS LEBANON’S IMPLEMENTATION OF BASEL LIQUIDITY COVERAGE RATIO AS CREDIT POSITIVE 3
> THE WORLD BANK APPROVES A $295 MILLION PACKAGE TO FINANCE THE “GREATER BEIRUT PUBLIC TRANSPORT PROJECT” 4
> LEBANESE TREASURY BILLS DOMESTIC PORTFOLIO VALUE UP BY 5.0% IN 2017 5
> INDUSTRIAL EXPORTS DROP BY 2.11% IN 2017 TO $2.47 BILLION 6 > CONSTRUCTION PERMITS AREA AT 1.43 MILLION SQM BY FEBRUARY 2018 7 > ANNUAL INFLATION IN LEBANON AT 5.19% IN FEBRUARY 2018 8 > TRIPOLI PORT ACTIVITY NARROWS BY 3.13% Y-O-Y IN JANUARY 2018 9 CORPORATE NEWS
> ALPHA GROUP OF BANKS POSTS NET PROFITS OF $2.40 BILLION IN 2017 10
> BANK AUDI EGYPT’S NET PROFITS AT $57.52 MILLION IN 2017 11 > BANK AUDI TO DISTRIBUTE DIVIDENDS TO SHAREHOLDERS 12 > BLOM BANK TO DISTRIBUTE DIVIDENDS TO SHAREHOLDERS 12 MONETARY PERFORMANCE
> MONETARY AGGREGATES 13 > MONEY MARKETS 13
LEBANESE EQUITIES
> LEBANESE EQUITIES & CREDIT LIBANAIS INDICES 14
LEBANON'S ECONOMIC & FINANCIAL SECTOR INDICATORS 16 LEBANON'S RATINGS 17
BEIRUT RANKS 181ST IN THE WORLD IN THE 2018 QUALITY OF LIVING INDEX
Beirut occupied the 14th position in the region and the 181st in the world in Mercer Institute’s 2018 Quality of Living Index. LIFE PREMIUM COLLECTIONS IN THE LEBANESE INSURANCE SECTOR UP BY 4.35% IN 2017
Al Bayan Economic Magazine unveiled that life insurance premium collections for 34 life insurance companies operating in Lebanon rose by 4.35% in 2017 to $520.89 million, from $499.18 million in 2016. MOODY’S CONSIDERS LEBANON’S IMPLEMENTATION OF BASEL LIQUIDITY COVERAGE RATIO AS CREDIT POSITIVE
Moody’s Investors Service expects that the Basel liquidity coverage ratio will help Lebanese banks improve their short-term liquidity management and avoid any potential liquidity shortages. THE WORLD BANK APPROVES A $295 MILLION PACKAGE TO FINANCE THE “GREATER BEIRUT PUBLIC TRANSPORT PROJECT”
The World Bank unveiled this week the Greater Beirut Public Transport Project (GBPTP), to which its financing contribution amounts to $295.0 million. LEBANESE TREASURY BILLS DOMESTIC PORTFOLIO VALUE UP BY 5.0% IN 2017
The government’s outstanding local currency debt rose by 5.0% in 2017 to $49.14 billion, up from $46.78 billion at year-end 2016.
TABLE OF CONTENTS
Weekly Market Watch
ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231
"BDL" Banque Du Liban "ABL" Association of Banks in Lebanon "MOF" The Lebanese Ministry of
Finance "BOP" Balance of Payment "IMF" The International Monetary Fund "Moody's" Moody's Investors Service "BSE" Beirut Stock Exchange "GDRs" Global Depositary Receipts "M1" Currency in Circulation + Demand
Deposits in LBP "M2" M1 + Other Deposits in LBP "M3" M2 + Deposits in Foreign Currencies "M4" M3+ Treasury Bills Held by Non-Banking System Including
Accrued Interests "CPI" Consumer Price Index "PPI" Producer Price Index "CLASI" Credit Libanais Aggregate Stock Index "CLFI" Credit Libanais Financial Sector Stock Index
"CLCI" Credit Libanais Construction Sector Stock Index “EIU” Economist Intelligence Unit “EOY” End of Year "P/E" Price to Earnings Multiple "P/BV" Price to Book Multiple "YTD" Year to Date "YTD Price Performance" Yield to Date Price Appreciation "LBP" The Lebanese Pound "USD" The United States Dollar "Y-O-Y" Year-on-Year "GDP" Gross Domestic Product "MENA" Middle East and North Africa
SYNOPSIS OF TERMS
Weekly Market Watch
ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231
BEIRUT RANKS 181ST IN THE WORLD IN THE 2018 QUALITY OF LIVING INDEX
Mercer Institute published this week its 20th annual edition of the “Quality of Living Survey” covering the year 2018 and comparing and ranking 231 cities around the world based on the ease of daily life and work activities for expatriates and their families. The report aims at providing multinational companies with timely and reliable information in order to help them determine and offer reasonable compensation to expatriates relative to their compromises in terms of quality of living when placed on international assignments. Particularly, the report analyzed living conditions according to 39 factors, classified under 10 major categories namely, political and social environment, economic environment, socio-cultural environment, medical and health considerations, schools and education, public services and transportation, recreation, consumer goods, housing, and natural environment. This year’s survey included as well a separate ranking of cities according to their sanitation, which was evaluated based on features like: waste removal and sewage infrastructure, levels of infectious disease, air pollution, and water availability and quality. With respect to the global ranking, and despite political and financial uncertainties in Europe, Western European cities dominated the quality of living index for the year 2018 occupying seven out of the top ten positions in the rankings. Specifically, Vienna topped the list of cities worldwide for the 9th consecutive year, followed by Zurich, and Auckland and Munich sharing the 3rd place. On a regional front, Dubai led Mercer’s list of Arab cities on the level of quality of living in the year 2018, with a global rank of 74, followed by Abu Dhabi (global rank: 77), Muscat (global rank: 105), Doha (global rank: 110), and Tunis (global rank: 114), only to name a few. Trailing the regional list for quality of living for expatriates in 2018 were the war-torn and politically unstable cities of Damascus (global rank: 225), Khartoum (global rank: 227), Sana’a (global rank: 229), and Baghdad (global rank: 231). Locally, Beirut occupied the 14th position in the region and the 181st in the world, performing better than several regional peers such as Algiers (global rank: 184), Djibouti (global rank: 190), Tripoli (global rank: 218), and Nouakchott (global rank: 221), in addition to the previously listed Arab cities that bottomed the list.
LEBANON NEWS
Weekly Market Watch
SOURCE: MERCER INSTITUTE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 1
City Regional Ranking Global Ranking
Vienna, Austria - 1Zurich, Switzerland - 2Auckland, New Zealand - 3Munich, Germany - 3Dubai, United Arab Emirates 1 74Abu Dhabi, United Arab Emirates 2 77Muscat, Oman 3 105Doha, Qatar 4 110Tunis, Tunisia 5 114Rabat, Morocco 6 117Amman, Jordan 7 119Casablanca, Morocco 8 124Kuwait City, Kuwait 9 126Manama, Bahrain 10 136Riyadh, Saudi Arabia 11 165Jeddah, Saudi Arabia 12 168Cairo, Egypt 13 178Beirut, Lebanon 14 181Algiers, Algeria 15 184Djibouti, Djibouti 16 190Tripoli, Libya 17 218Nouakchott, Mauritania 18 221Damascus, Syria 19 225Khartoum, Sudan 20 227Sana'a, Yemen 21 229Baghdad, Iraq 22 231Source: Mercer Institute, Credit Libanais Economic Research Unit
2018 Quality of Living Survey
LEBANON NEWS
LIFE PREMIUM COLLECTIONS IN THE LEBANESE INSURANCE SECTOR UP BY 4.35% IN 2017
“Al Bayan Economic” magazine, the specialized banking, insurance & shipping pan-Arab monthly magazine, published in its March 2018 issue (Issue No. 556) an overview on the life insurance premiums collected by the 34 life insurance companies operating in Lebanon in the year 2017. More specifically, the article unveiled that life insurance premium collections rose by 4.35% in 2017 to $520.89 million, from $499.18 million in 2016. “Al Bayan” also highlighted the exceptional performance of insurance companies affiliated to banks for yet another consecutive year. For instance, Bancassurance (which channels insurance products through Fransabank, Banque Libano-Française, and BLC Bank) amassed the second largest life premium collections of $78.61 million in 2017, right after Metlife ($88.14 million). From another perspective, and according to the article, the ten largest insurance companies operating in Lebanon detained the lion’s share (63.7%) of the combined life and non-life premium collections in the year 2017, with the twenty largest companies controlling a stake of 87.0%. Among said companies, Allianz SNA topped the list of insurance companies, with its life and non-life premium collections aggregating to $141.41 million, followed by Metlife ($122.75 million), Bankers ($118.64 million), and LIA ($116.80 million), only to name a few. The largest annual expansion in life insurance premium collections came in favor of Phenicienne Insurance (70.73%), followed by Beirut Life (32.57%), LIA (14.97%), and Libano Suisse (11.43%). It is worth noting that 23 out of the 34 companies managed to grow their life insurance premium collections in 2017, while 8 suffered annual contractions in life premium collections and 3 companies witnessed a relatively stable flow of collections.
Weekly Market Watch
SOURCE: AL BAYAN ECONOMIC MAGAZINE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 2
(USD Thousands) 2016 2017 Y-O-Y % Change
Metlife 87,290 88,140 1.0%
Bancassurance 76,030 78,610 3.4%
Allianz SNA 67,500 70,080 3.8%
LIA 44,150 50,760 15.0%
ADIR 45,280 49,475 9.3%
Arope 38,700 38,710 0.0%
SGBL Insurance 33,400 36,060 8.0%
AXA M. E. 16,100 16,750 4.0%
Beirut Life 11,390 15,100 32.6%
Bankers 11,930 12,460 4.4%
Medgulf 13,300 11,100 -16.5%
CLA 9,800 9,120 -6.9%
Libano Suisse 6,910 7,700 11.4%
Securite 6,670 5,450 -18.3%
Fidelity 4,800 5,340 11.3%
Capital 4,420 4,630 4.8%
Burgan 2,680 2,710 1.1%
RL 360° 2,600 2,240 -13.8%
Trust Compass 2,500 2,210 -11.6%
Arabia 2,100 2,170 3.3%
Life Insurance Premium Collections at the 20 Largest Lebanese Insurance Companies
Source: A l Bayan Economic M agazine, Credit Libanais Economic Research Unit
(USD Thousands) 2016 2017 Y-O-Y % Change
Allianz SNA 131,100 141,410 7.9%
Metlife 122,630 122,750 0.1%
Bankers 112,380 118,640 5.6%
LIA 105,790 116,800 10.4%
Medgulf 115,830 103,800 -10.4%
Arope 98,920 103,180 4.3%
AXA M. E. 96,850 100,100 3.4%
Bancassurance 76,030 78,610 3.4%
Libano Suisse 80,700 77,800 -3.6%
Fidelity 73,020 76,130 4.3%
ADIR 67,290 72,845 8.3%
Continental Trust 53,010 56,360 6.3%
Al Mashrek 42,480 43,390 2.1%
Assurex 35,060 38,410 9.6%
SGBL Insurance 33,400 36,060 8.0%
ALIG 30,480 28,810 -5.5%
UFA 22,900 28,780 25.7%
Arabia 24,770 27,920 12.7%
Cumberland 25,510 27,680 8.5%
Capital 23,680 22,770 -3.8%
Life & Non-Life Insurance Premium Collections at the 20 Largest Lebanese Insurance Companies
Source: A l Bayan Economic M agazine, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: MOODY’S INVESTORS SERVICE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 3
MOODY’S CONSIDERS LEBANON’S IMPLEMENTATION OF BASEL LIQUIDITY COVERAGE RATIO AS CREDIT POSITIVE
Moody’s Investors Service, the international rating agency, released a “Credit Outlook – Credit Implications of Current Events” report in which it tackled several international hot topics, among which was the Lebanese central bank’s Basic Circular 145 concerning the application of the Basel liquidity coverage ratio (LCR) for commercial banks. The LCR is calculated as the ratio of the stock of High Quality Liquid Assets (HQLA) divided by the total Net Cash Outflows over the next 30 calendar days. The LCR calculation, which decrees that said ratio should exceed 100% for each currency that is equivalent to more than 5% of a bank’s total liabilities (these currencies are usually the Lebanese Pound and the US Dollar for Lebanese banks), will be applied on a standalone basis for banks in Lebanon and their foreign branches and subsidiaries. The agency mentioned that it is expected that the LCR will help banks improve their short-term liquidity management and avoid any potential liquidity shortages. Moreover, and citing the circular’s classification of banks’ non-reserve deposits with Banque Du Liban (BDL) (including certificates of deposits and Lebanese government securities in both domestic and foreign currencies) as part of the stock of high quality liquid assets, Moody’s anticipated that Lebanese banks already meet the LCR requirements as they are highly exposed to such securities. Nevertheless, the agency stated that banks will very likely be incapable of quickly liquidating their portfolio of Lebanese sovereign instruments without incurring a loss in value during a 30-day liquidity stress scenario (as per Basel requirements), since there is a narrow secondary market for these sovereign securities. Moody’s commented as well that in spite of the fact that the LCR will provide guidance for banks to restructure their balance sheets to address any liquidity shortfalls, a systemic foreign currency liquidity crisis will exercise pressure on BDL’s foreign currency reserves. Furthermore, Moody’s added that cash outflow rates meet the Basel recommendations, but the application of BDL’s conservative run-off rates for retail deposits addresses the risk associated with the inclusion of potentially illiquid sovereign securities among high quality liquid assets. In this vein, BDL requires a 10% run-off rate for residents’ retail deposits and a 20% for non-resident high net worth individuals, compared to Basel’s respective thresholds of 5% and 10%. BDL’s stated run-off rates are even more conservative than previously recorded overall outflow rates the system has seen. For instance, outflows stood at around 3% in March 2005 (political shock), at 4% in July 2006 (Israeli aggression against Lebanon), and, most recently, reached 2% upon Prime Minister Saad Hariri’s temporary resignation in early November 2017. Finally, Moody’s indicated that BDL’s Basic Circular 145 calls for banks to test the LCR under harsher conditions such as: calculating net cash outflows over 90 days instead of 30, assume higher outflow rates, and examine the effect of these ratios had there been no reliance on or no interference from the central bank for liquidity.
LEBANON NEWS
Weekly Market Watch
SOURCE: WORLD BANK, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 4
THE WORLD BANK APPROVES A $295 MILLION PACKAGE TO FINANCE THE “GREATER BEIRUT PUBLIC TRANSPORT PROJECT”
In a press release followed by a detailed report, The World Bank unveiled this week the Greater Beirut Public Transport Project (GBPTP), to which its financing contribution amounts to $295.0 million. According to the press release, the GBPTP is the first project to benefit from the lately approved Public-Private Partnership law the aim of which is to attract private investments in the country’s infrastructure in order to ease financial pressures given the government’s already weak public finances and rallying public debt. Moreover, said project, the implementation of which is expected to start in the current year and end by year 2024, represents the first phase of an ambitious long-term national public transport program, and is likely to be followed by further phases covering the southern and eastern entrances to Beirut. In detail, the project involves the purchase of a total of 120 buses to service a distance of 40 kilometers of dedicated Bus Rapid Transit (BRT) lanes from northern districts to the heart of Beirut City. In addition, 250 feeder buses are planned to operate between main stations and the hinterland. It is worth mentioning that the BRT system along with its feeder bus network will be operated and maintained by the private sector. The World Bank highlighted the various benefits and advantages the GBPTP will bring through and upon its completion which are as follows:
Secure the employment of thousands of unskilled Lebanese and Syrian workers through the creation of a total of two million labor days in construction jobs.
Jumpstart Lebanon’s very first modern public transport system in decades. Reduce stifling congestions on Lebanese roads. Unlock private finance to and private engagement in a major infrastructure field. Attract around 300,000 passengers per day and halve commuting time between Beirut and its
northern suburbs. Improve and facilitate the mobility of women, youth, and disabled persons through its safety,
modernity, and reliability. Significantly diminish greenhouse gas emissions and improve air quality through introducing new
and clean buses and decreasing users’ reliance on private vehicles.
The tables below present a detailed breakdown of the financing scheme of the GBPTP by sources of funds, project components, and yearly disbursements. It is worth noting that $225.2 million of the total $295.0 million amount approved by the World Bank will be channeled in the form of a loan through the International Bank for Reconstruction and Development (IBRD) while the remaining $69.8 million will be channeled through the Global Concessional Financing Facility (GCFF) on a grant basis. The loan will be paid over a period of 31.5 years including an eight-year grace period. The covered financing raises the total value of World Bank commitments to Lebanon to $1.7 billion.
Project Components IBRD and GCFF Financing (USD Million)
Private Sector Financing (USD Million)
Total Indicative Cost (USD Million)
Component 1 180.0 50.0 230.0Bus Rapid Transit (BRT) Infrastructure (Incl. Land Acquisition)
160.0 0.0 160.0
BRT Fleet 13.0 50.0 63.0Intelligent Transport Systems (ITS) 7.0 0.0 7.0
Component 2 104.4 0.0 104.4Street Furniture, ITS/Telematic, and Roadworks 59.4 0.0 59.4
Feeder Bus Fleet 40.0 0.0 40.0Technical Assistances 5.0 0.0 5.0Component 3 10.0 0.0 10.0Capacity Building and Implementation Support 5.0 0.0 5.0
Awareness Campaign and Sector Reforms 5.0 0.0 5.0
Front End Fee 0.6 0.0 0.6Total 295.0 50.0 345.0Source: World Bank, Credit Libanais Economic Research Unit
Costs and Financing of the Greater Beirut Public Transport Project
Year 2018 2019 2020 2021 2022 2023 2024
Value 2.11 17.40 23.18 39.16 69.86 89.80 53.49
Expected Disbursements (USD Million)
Source: World Bank, Credit Libanais Economic Research Unit
Weekly Market Watch
SOURCE: THE LEBANESE MINISTRY OF FINANCE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 5
LEBANON NEWS
LEBANESE TREASURY BILLS DOMESTIC PORTFOLIO VALUE UP BY 5.0% IN 2017
According to the Lebanese Ministry of Finance’s “Debt and Debt Markets” quarterly report, Lebanon’s gross public debt widened by 6.2% in the year 2017 to LBP 119,898 billion ($79.53 billion), up from LBP 112,910 billion ($74.90 billion) at end of 2016. More particularly, the government’s outstanding local currency debt rose by 5.0% in 2017 to LBP 74,077 billion ($49.14 billion), up from LBP 70,528 billion ($46.78 billion) at year-end 2016. In light of the several rounds of financial engineering schemes introduced in 2016, the Lebanese Central Bank controlled the lion’s share of the government’s local currency Treasury bills portfolio (48.2%), followed by commercial banks (37.3%) and public institutions (12.1%), as illustrated in the table hereunder: As far as the maturity spectrum is concerned, the bulk (95.8%) of Lebanon’s outstanding Treasury bills portfolio is long-term in nature (in excess of one year), addressing as such the government’s long term borrowing needs on the one hand, and lenders’ pursuit of attractive yields on the other amid the scarcity of lucrative placement opportunities for banks in the international financial and money markets. The share of T-bonds having a tenure of seven years and above stood at 47.3% of the outstanding Treasury bills portfolio, with bonds having a tenor of five years representing 22.9%, followed by the three-year (15.5%) and two-year to maturity (10.1%) T-bonds. The share of short-term Treasury bills represented a small 4.2% proportion of the outstanding Treasury bills portfolio. From another standpoint, foreign currency debt soared by 8.1% in 2017 to LBP 45,821 billion ($30.40 billion), up from LBP 42,382 billion ($28.11 billion) at end of 2016. Eurobonds constituted the bulk (92.40%) of foreign currency debt, followed, and at quite a distance, by multilateral loans (4.28%) and bilateral facilities (2.04%). As far as the currency breakdown of multilateral and bilateral loans is concerned, U.S. Dollar denominated loans accounted for 33.20% of total multilateral and bilateral loans, followed closely by Kuwaiti Dinar (29.04%) and Euro (24.50%) denominated loans. Sector-wise, the vast majority (33.18%) of said loans was directed to the water sector, followed by government & general technical services (18.68%) and the transportation sector (17.29%), only to name a few.
Dec-2011 Dec-2012 Dec-2013 Dec-2014 Dec-2015 Dec-2016 Dec-2017BDL 32.3% 29.2% 29.8% 31.6% 36.7% 42.9% 48.2%Commercial Banks 51.9% 55.1% 53.7% 51.5% 46.3% 41.8% 37.3%Public Institutions 13.3% 12.9% 12.7% 12.5% 13.0% 12.4% 12.1%Others 2.5% 2.8% 3.8% 4.4% 3.9% 3.0% 2.4%
Breakdown of Domestic T-Bills Outstanding by Investor Type
Source: The Lebanese M inistry o f Finance, Credit Libanais Economic Research Unit
Short Term T-bills4.2% 24-Month Notes
10.1%36-Month Notes
15.5%
60-Month Notes22.9%
84-Month & Above Notes47.3%
Breakdown of Domestic T-Bills Outstanding by Tenoras at End of 2017
Source: MOF, Credit Libanais Economic Research Unit
USD, 33.20%
Euro, 24.50%
Kuwaiti Dinar,
29.04%
Islamic Dinar, 6.66%
Saudi Arabian Riyal, 3.46%
Others, 3.14%
Breakdown of Multilateral and Bilateral Loans by Currency as at End of 2017
Water, 33.18%
General and Technical
Government Services, 18.68%
Transportation, 17.29%
Power, 9.35%
Health, 7.22%
Others, 14.28%
Breakdown of Multilateral and Bilateral Loans by Sector as at End of 2017
INDUSTRIAL EXPORTS DROP BY 2.11% IN 2017 TO $2.47 BILLION
According to the Lebanese Ministry of Industry, Lebanon’s industrial exports widened by 7.07% during the last month of the previous year to $219.6 million, compared to $205.1 million in November. On an annual basis however, industrial exports fell by 2.11% to nearly $2.47 billion during the year 2017, down from around $2.53 billion in 2016. On the other hand, industrial imports increased by 9.30% to $257.3 million in 2017, compared to $235.4 million a year earlier.
Exports of “machinery and electrical equipment” accounted for the bulk ($485.1 million <19.61%>) of the total exports bill in 2017, followed by “prepared foodstuffs and tobacco” ($471.4 million <19.06%>) and “products of the chemical industries” ($396.7 million <16.04%>). On the imports front, Italy led the list of countries exporting to Lebanon ($54.7 million <21.24%>), followed by China ($54.3 million <21.12%>) and Germany ($35.5 million <13.78%>) as elaborated in the section below:
LEBANON NEWS
Weekly Market Watch
SOURCE: THE LEBANESE MINISTRY OF INDUSTRY, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 6
Y-O-Y
(USD Million) 2016 2017 % Change
Industrial Exports 2,526.9 2,473.6 -2.11%
Industrial Imports of Equipment & Machinery 235.4 257.3 9.30%Source: Ministry of Industry, Credit Libanais Economic Research Unit
Evolution of Industrial Activity during the Year
2,200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
3,000
2015 2016 2017
2,955.8
2,526.92,473.6
$ Million
Evolution of Industrial Exports
Source: Ministry of Industry, Credit Libanais Economic Research Unit
220
225
230
235
240
245
250
255
260
2015 2016 2017
243.4
235.4
257.3$ Million
Evolution of Industrial Imports of Equipment & Machinery
Source: Ministry of Industry, Credit Libanais Economic Research Unit
Product Value ($ Million)Machinery and Electrical Equipment 485.1Prepared Foodstuffs and Tobacco 471.4Products of the Chemical Industries 396.7Base Metals and Articles of Base Metal 341.3Plastics & Rubbers and Articles Thereof 156.8Others 622.3Total Industrial Exports 2,473.6Source: M inistry of Industry, Credit Libanais Economic Research Unit
Breakdown of Industrial Exports by Product during the Year 2017
Country Value ($ Million)Italy 54.7China 54.3Germany 35.5Romania 13.6France 12.3Others 87.0Total Industrial Imports 257.3
Breakdown of Industrial Imports of Equipment & Machinery by Country of Origin during the Year 2017
Source: M inistry o f Industry, Credit Libanais Economic Research Unit
Machinery and Electrical Equipment
19.61%
Prepared Foodstuffs and Tobacco
19.06%
Products of the Chemical Industries
16.04%
Base Metals and Articles of Base Metal
13.80%
Plastics & Rubbers and Articles Thereof
6.34%
Others25.16%
Breakdown of Industrial Exports by Product in 2017
Italy21.24%
China21.12%
Germany13.78%
Romania5.27%
France4.77%
Others33.81%
Breakdown of Imports of Equipment & Machinery by Country in 2017
LEBANON NEWS
Weekly Market Watch
SOURCE: ORDER OF ENGINEERS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 7
CONSTRUCTION PERMITS AREA AT 1.43 MILLION SQM BY FEBRUARY 2018
The surface area of construction permits in Lebanon, which reflects the level of future supply in the real estate sector, widened to 778,318 sqm during the month of February 2018, up from 651,165 sqm in January. On a cumulative basis, however, the surface area of construction permits fell by 7.13% y-o-y to 1,429,483 sqm in the first two months of the current year, compared to 1,539,259 sqm level during that same period last year. As far as the geographical distribution of construction permits is concerned, the Mount Lebanon region continued to control the lion’s share of the total surface area of issued permits (735,619 sqm <51.46%>), followed by the South (258,221 sqm <18.06%>), Bekaa (159,303 sqm <11.14%>), Nabatieh (157,799 sqm <11.04%>), and Beirut (102,276 sqm <7.15%) regions. It is worth noting that figures for the North governorate are underestimated since they exclude permits issued by the North Order of Engineers.
The Beirut governorate enjoyed the highest exploitation coefficient, which stood at 930 sqm per construction permit by February 2018, followed by the Mount Lebanon (842 sqm/transaction), Bekaa (693 sqm/transaction), South (573 sqm/transaction), North (542 sqm/transaction), and Nabatieh (509 sqm/transaction) governorates.
Feb-2012 1,901,863
Feb-2013 1,415,262
Feb-2014 1,797,682
Feb-2015 1,557,256
Feb-2016 787,494
Feb-2017 1,539,259
Feb-2018 1,429,483
Source: Order o f Engineers, Credit Libanais Economic Research Unit
Evolution of Construction Permit Areas (Sqm) During the Two-Month Period Ending
0200,000400,000600,000800,000
1,000,0001,200,0001,400,0001,600,0001,800,0002,000,000
Feb-2012 Feb-2013 Feb-2014 Feb-2015 Feb-2016 Feb-2017 Feb-2018
1,901,863
1,415,262
1,797,682
1,557,256
787,494
1,539,2591,429,483
Evolution of Construction Permit Areas (Sqm)
Sqm No. of Transactions
Average Sqm/Trans.
Beirut 102,276 110 930
Mount Lebanon 735,619 874 842
North* 16,265 30 542
Bekaa 159,303 230 693
South 258,221 451 573
Nabatieh 157,799 310 509
Total 1,429,483 2,005 713
* Figures for the North Governorate are underestimated since they exclude
permits issued by the North Order of Engineers
Source: Order of Engineers, Credit Libanais Economic Research Unit
Geographical Breakdown of Construction Permitsup to February 2018
Beirut7.15%
Mount Lebanon51.46%
North*1.14%
Bekaa11.14%
South18.06%
Nabatieh11.04%
Geographical Breakdown of Construction Permit Areas up to February 2018
Source: Order of Engineers, Credit Libanais Economic Research Unit
0 200 400 600 800 1000
Beirut
Mount Lebanon
Bekaa
South
North*
Nabatieh
930
842
693
573
542
509
Average Sqm/Construction Permit per Region up to February 2018
Source: Order of Engineers, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: CENTRAL ADMINISTRATION OF STATISTICS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 8
ANNUAL INFLATION IN LEBANON AT 5.19% IN FEBRUARY 2018
According to the Central Administration of Statistics (CAS), monthly inflation in Lebanon, as captured by the change in the consumer price index (CPI), stood at 0.20% during the month of February 2018 compared to 0.05% in January. On an annual basis, Lebanon’s CPI rose by 5.19% to 104.14 in February 2018, from 99.00 a year earlier. Said annual increase owes to the fact that all index constituents have witnessed price hikes, particularly a 6.44% increase in the prices of water, electricity, gas and other fuels (11.8% weight in the index) coupled with a 3.94% surge in the prices of food & non-alcoholic beverages (20.0% weight in the index), a 14.82% rise in the cost of clothing & footwear (5.2% weight in the index), some 4.28% appreciation in owner occupied housing prices (13.6% weight in the index), and a 5.20% expansion in the cost of transportation (13.1% weight in the index), only to name a few. The following section captures the fluctuation in Lebanon’s consumer basket’s key constituents: On a geographical basis, all regions, except for the North, witnessed a monthly appreciation in their CPI values in February, particularly 1.10% in Nabatieh, 1.05% in Beirut, 0.33% in Mount Lebanon, 0.09% in the Bekaa, and 0.02% in the South. The following chart captures the evolution of the yearly change in CPI values since December 2010:
Monthly (January 2018 -
February 2018) % Change
Annual(February 2017 -
February 2018) % Change
Weight
Food & Non-Alcoholic Beverages 1.01% 3.94% 20.0%
Alcoholic Beverages & Tobacco 0.08% 8.27% 1.4%
Clothing & Footwear -3.70% 14.82% 5.2%
Housing - Actual Rent 0.28% 6.16% 2.9%
Housing - Owner Occupied 0.09% 4.28% 13.6%Housing - Water, Electricity, Gas and Other Fuels 0.48% 6.44% 11.8%
Furnishings, Household Equipment & Routine Household Maintenance 0.79% 4.21% 3.8%
Health -0.24% 4.49% 7.7%
Transportation 1.06% 5.20% 13.1%
Communication 0.20% 1.07% 4.5%
Recreation, Amusement, and Culture 0.53% 6.59% 2.4%
Education 0.20% 3.96% 6.6%
Restaurant & Hotels 0.19% 4.61% 2.8%
Miscellaneous Goods & Services 0.17% 2.93% 4.1%
Consumer Price Index 0.20% 5.19% 100.0%
Price Volatility
Source: Central Administration of Statistics, Credit Libanais Economic Research Unit
Region Monthly Inflation WeightBeirut 1.05% 10.8%Mount Lebanon 0.33% 47.2%North -0.39% 18.0%Bekaa 0.09% 9.2%South 0.02% 8.7%Nabatieh 1.10% 6.1%Lebanon 0.20% 100.0%
February 2018 Inflation Across Regions
Source: Central Administration of Statistics, Credit Libanais Economic Research Unit
3.40%
4.60%
3.10%
10.10%
1.10%
-1.43%
-3.40%
3.14%
5.19%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Feb-18
Evolution of Yearly Change in CPI
LEBANON NEWS
Weekly Market Watch
SOURCE: PORT OF TRIPOLI, AL BAYAN ECONOMIC MAGAZINE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 9
TRIPOLI PORT ACTIVITY NARROWS BY 3.13% Y-O-Y IN JANUARY 2018
Freight activity via the Port of Tripoli improved to around 164 thousand tons during the first month of the current year, up from 137 thousand tons in December 2017. In detail, imported freight accounted for 80.56% of total freight (131,925 tons), while export activity constituted 19.44% (31,835 tons). On an annual basis, however, Tripoli Port freight activity contracted by 3.13% when compared to the 169 thousand tons figure reported in January of last year. Similarly, the number of vessels fell by 20.00% on a yearly basis to 48 as at end of January 2018, down from 60 vessels a year before, and the number of imported cars via the Tripoli Port decreased by 1.93% to 305, compared to 311 in January 2017. In this context, port-related revenues (excluding VAT and customs) increased by 3.05% on an annual basis to around $2.06 million in the first month of the current year, up from $2.00 million in January of the previous year. According to Al Bayan Economic Magazine, Tripoli Port has been recently granted an $86 million loan from The Islamic Development Bank in order to improve its logistic services and overall capacity and further develop its infrastructure. Moreover, the money will also be used to build up the basis of a “smart port”, particularly through helping meet electronic needs and requirements and purchase the necessary advanced equipment and machinery.
Tripoli Port
Indicators Jan-17 Jan-18 Y-O-Y % Change
Freight Activity (000 Tons) 169 164 -3.13%
Number of Vessels 60 48 -20.00%
Number of Imported Cars 311 305 -1.93%
Port-Related Revenues ($ Million) 2.00 2.06 3.05%
For the Month of
Source: Port of Tripoli, Al Bayan Economic Magazine, Credit Libanais Economic Research Unit
Weekly Market Watch
SOURCE: BANKDATA, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 10
ALPHA GROUP OF BANKS POSTS NET PROFITS OF $2.40 BILLION IN 2017
The Lebanese banking sector continues to prove its resilience in the face of the prolonged local and regional tensions. More specifically, the aggregate net after-tax profits of the Alpha group of banks rose by 6.04% y-o-y to $2,401.24 million in 2017, up from $2,264.53 million in 2016. It is worth noting that the Alpha group of banks comprises 15 banks having a deposit base exceeding the $2 billion mark each, and includes Bank Audi, BLOM Bank, BankMed, Banque Libano-Française, Byblos Bank, Credit Libanais, Bank of Beirut, Bank Beirut & the Arab Countries (BBAC), First National Bank, IBL Bank, Société Générale de Banque au Liban, Fransabank, Lebanon and Gulf Bank, CreditBank, and the new-comer Saradar Bank. In details, the group witnessed some 6.11% y-o-y increase in net interest income to $4.03 billion and some three-fold rally in other operating income to $620.26 million, which were diluted by the sharp 42.48% drop in net fee and commission income to $893.58 million and the 62.40% plunge in net gains on financial instruments to $866.20 million. Consequently, net operating income contracted by 9.57% on an annual basis to $5.89 billion in 2017, met by a parallel 4.89% contraction in total operating expenses to $3.13 billion. On the balance sheet front, the consolidated assets of Alpha banks widened by 6.63% during the year 2017 to around $232.98 billion (compared to a 7.61% increase for the local banking sector which excludes foreign affiliates), up from $218.50 billion as at year-end 2016, fueled by the 1.63% expansion in the portfolio of net loans & acceptances (compared to some 5.49% rise for the local banking sector) to $66.48 billion. In the same vein, customer deposits added 3.46% (in comparison with around 3.92% annual growth in the local banking sector) in 2017 to just below $182.50 billion from $176.39 billion at end of year 2016. More specifically, Alpha group’s domestic customer deposits grew by 4.84% to $156.80 billion in 2017, while non-resident deposits fell by 4.26% to $25.79 billion. In this context, the Alpha group’s ratio of net loans to customer deposits fell slightly to 36.43% by year-end 2017 (compared to a local banking sector ratio of 34.87% when factoring out foreign subsidiaries), with shareholders’ equity propelling 6.38% higher (compared to a local banking sector increase of 4.82%) at just above $21.78 billion. From an asset quality standpoint, the ratio of gross doubtful loans to gross loans receded from 5.65% at end of 2016 to 5.63% by end of 2017, mirroring a slight improvement in the quality of the loans portfolio. As far as profitability ratios are concerned, the Alpha group reported in 2017 returns on average assets (ROaA) and average equity (ROaE) of 1.06% and 11.36% respectively. It is worth noting that the branch network of Alpha banks narrowed by 14 during the year 2017 to 1,197, with the number of employees in the Alpha group also declining by 11 to 30,854.
CORPORATE NEWS
In Millions of USD As at End of December 2016
As at End of December 2017 % Change
Key Balance Sheet FiguresTotal Assets 218,495.37 232,982.18 6.63%Net Loans & Acceptances 65,408.24 66,475.01 1.63%Customer Deposits 176,393.30 182,495.68 3.46%Shareholders' Equity 20,477.62 21,784.32 6.38%
Key Ratios (%)Net Loans & Acceptances to Customer Deposits 37.08% 36.43%Primary Liquidity to Assets 35.12% 40.58%Gross Doubtful Loans to Gross Loans 5.65% 5.63%Collective Provisions to Net Loans 1.57% 1.73%
In Millions of USD 2016 2017 Y-O-Y % Change
Key P&L Figures
Net Interest Income 3,798.32 4,030.32 6.11%Net Commission and Fee Income 1,553.44 893.58 -42.48%Net Gain on Financial Instruments 2,303.50 866.20 -62.40%Other Operating Income 172.29 620.26 260.00%Net Operating Income 6,515.69 5,892.03 -9.57%Total Operating Expenses 3,291.72 3,130.91 -4.89%Net Profits 2,264.53 2,401.24 6.04%
Key Ratios (%)Cost to Income 43.19% 47.65%ROaA 1.07% 1.06%ROaE 11.62% 11.36%
Consolidated Financial Performance of Alpha Group of Banks
Source: Bankdata, Credit Libanais Economic Research Unit
Weekly Market Watch
SOURCE: BSE, BANK AUDI, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 11
BANK AUDI EGYPT’S NET PROFITS AT $57.52 MILLION IN 2017
Bank Audi S.A.E., the Egyptian affiliate of Bank Audi S.A.L., published its audited financial statements for the year 2017, reporting a sizeable 45.79% y-o-y decrease in its net after tax profits to EGP 1,020.88 million ($57.52 million), down from EGP 1,883.32 million ($103.71 million) in 2016. In particular, net interest income rallied by 27.64% to EGP 1,903.40 million ($107.24 million), net commission & fee income rose by 11.71% to EGP 482.35 million ($27.18 million), and impairment charges on credit losses dropped by 34.44% to EGP 178.30 million ($10.05 million). However, the aforementioned were altogether outweighed by the 30.14% y-o-y expansion in administrative expenses to EGP 818.40 million ($46.11 million) coupled with the EGP 1,530.51 million plunge in other operating income to a loss of EGP 68.60 million ($3.87 million), compared to some EGP 1,461.91 million ($80.51 million) gain recorded in 2016, which owed mainly to foreign exchange gains stemming from the dramatic depreciation (57.00%) of the Egyptian Pound against the US Dollar during that same year. On the balance sheet front, Bank Audi S.A.E.’s consolidated assets expanded by 1.41% during the year 2017 to just over EGP 55.97 billion ($3.15 billion), despite the 2.44% contraction in loans and facilities to nearly EGP 29.40 billion ($1.66 billion). On the funding side, customer deposits widened by 4.03% in 2017 to around EGP 47.37 billion ($2.67 billion), with the ratio of net loans to customer deposits dropping to 62.05%, compared to 66.17% at year-end 2016. The bank’s shareholders’ equity expanded to about EGP 5.56 billion ($313.44 million) by end of 2017, from EGP 4.65 billion ($256.00 million) at year-end 2016.
CORPORATE NEWS
In Millions of EGPAs at End of December
2016
As at End of December
2017 % Change
Key Balance Sheet FiguresTotal Assets 55,193.51 55,971.02 1.41%Loans and Facilities 30,131.79 29,396.29 -2.44%Customer Deposits 45,538.21 47,373.39 4.03%Shareholders' Equity 4,648.55 5,563.12 19.67%
Liquidity Ratios (%)Net Loans to Customer Deposits 66.17% 62.05%
In Millions of EGP 2016 2017 % ChangeKey P&L FiguresNet Interest Income 1,491.22 1,903.40 27.64%Net Commission and Fee Income 431.80 482.35 11.71%Impairment Charges on Credit Losses 271.96 178.30 -34.44%Administrative Expenses 628.85 818.40 30.14%Other Operating Income 1,461.91 -68.60 -104.69%Net Profits 1,883.32 1,020.88 -45.79%
Bank Audi Egypt
Source: BSE, Bank Audi, Credit Libanais Economic Research Unit
0.00
500.00
1,000.00
1,500.00
2,000.00
2016 2017
1,883.32
1,020.88
Mil
lion
s of
EG
P
Evolution of Bank Audi Egypt's Profitability
Weekly Market Watch
SOURCE: BSE, BANK AUDI, BLOM BANK, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 12
BANK AUDI TO DISTRIBUTE DIVIDENDS TO SHAREHOLDERS
According to an announcement issued by Bank Audi S.A.L. and a related information statement to the holders of Bank Audi Global Depositary Receipts (GDRs) both circulated by the Beirut Stock Exchange on March 23, 2018, the bank’s Board of Directors decided during its meeting held on March 20 to propose to the Ordinary General Assembly, which will convene on April 10, 2018, to distribute dividends to shareholders on the following basis: LBP 829.125 per common share and GDR subject to the applicable withholding tax (i.e. an aggregate
amount of LBP 331,442 million ($219.9 million)); $6 per preferred share Series “G” subject to the applicable withholding tax (i.e. an aggregate amount
of LBP 13,568 million ($9 million)); $6.5 per preferred share Series “H” subject to the applicable withholding tax (i.e. an aggregate amount
of LBP 7,349 million ($4.9 million)); and $7 per preferred share Series “I” subject to the applicable withholding tax (i.e. an aggregate amount of
LBP 26,381 million ($17.5 million)); and $4 per preferred share Series “J” subject to the applicable withholding tax (i.e. an aggregate amount of
LBP 16,583 million ($11 million)). The payment date for all holders of record as at April 13, 2018 is scheduled on or about April 16, 2018. BLOM BANK TO DISTRIBUTE DIVIDENDS TO SHAREHOLDERS
According to a notice issued by BLOM Bank S.A.L. and distributed by the Beirut Stock Exchange on March 19, 2018, the bank’s Board of Directors decided during its meeting held on March 16 to propose to the Ordinary General Assembly, which will convene on April 11, 2018, to distribute dividends to shareholders on the basis of LBP 1,700 per common share subject to the applicable withholding tax. The dividend payment date is scheduled for April 17, 2018.
CORPORATE NEWS
MONETARY AGGREGATES
All monetary aggregates ended the week of March 8, 2018 on a negative note. In fact, the overall money supply, “M4”, plunged by LBP 491.23 billion on a weekly basis, yet rose by 3.03% on an annual basis to LBP 219,312 billion, noting that the non-banking sector’s Treasury bills portfolio fell by LBP 185 billion during the concerned week.
Similarly, Lebanese-Pound denominated deposits and currency in circulation, “M1”, narrowed by LBP 246.12 billion week-on-week to LBP 10,187 billion on the back of some LBP 306 billion drop in demand deposits, which outweighed the LBP 60 billion expansion in money in circulation. On a yearly basis, however, “M1” increased by 3.88%. Local currency term deposits, “M2”, receded by LBP 277.54 billion on a weekly basis and by 3.17% year-on-year to settle at LBP 80,139 billion.
Consequently, private sector term and saving deposits denominated LBP (“M2-M1”) edged LBP 28.69 billion (0.04%) lower during the week of March 8 to LBP 69,952 billion, with deposits denominated in foreign currencies (“M3-M2”) slipping by LBP 31.43 billion (0.02%) to LBP 128,531 billion. MONEY MARKETS
The March 15th Treasury bill auction raised LBP 803.022 billion ($532.685 million), compared to LBP 556.881 billion ($369.407 million) in the auction of the previous week.
The majority of subscriptions (43.61%) was concentrated in the ten-year to maturity T-bonds, followed, and at a short distance, by the two-year (43.59%) T-bills, and then by the six-month (12.80%) tenure Treasury securities.
Consequently, the weighted average yield on Lebanese Pound Treasury bills stood at 6.44% in the auction of March 15. The yields on the six-month, two-year, and ten-year to maturity Treasury securities remained flat at 4.99%, 5.84%, and 7.46% respectively.
MONETARY PERFORMANCE
Weekly Market Watch
SOURCE: BDL, REUTERS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 13
Lebanese Treasury Bills 3 Months 6 Months 12 Months 24 Months 36 Months 60 Months 84 Months 120 MonthsTreasury Yield 4.44% 4.99% 5.35% 5.84% 6.50% 6.74% 7.08% 7.46%
3 Months
6 Months
12 Months
24 Months
36 Months60 Months
84 Months
120 Months
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
6.00%
6.50%
7.00%
7.50%
8.00%
0 1 2 3 4 5 6 7 8 9
On The Run Yield Curve
Mone y SupplyLBP Billion
M1 10,434 10,187 - 2.36%
M2 80,417 80,139 - 0.35%
M3 208,977 208,670 - 0.15%
M4 219,803 219,312 - 0.22%
M2 - M1 6 9 ,9 8 3 6 9 ,9 5 2 - 0 .0 4 %
M3 - M2 12 8 ,5 6 0 12 8 ,5 3 1 - 0 .0 2 %
Ma rc h 1, 2 0 18 Ma rc h 8 , 2 0 18 % Cha nge
Source: Banque Du Liban, Credit Libanais Economic Research Unit
150,000
200,000
250,000
March 1,2018
March 8,2018
219,803 219,312208,977 208,670
Money Supply - LBP Billion -
M4 M3
Source: BDL, Credit Libanais Economic Research Unit
Lebanese Treasury Bills
Yield (%)Face Value (in billions
of LBP)
% of Total Face Value
6 Months 4.99% 102.820 12.80%24 Months 5.84% 350.000 43.59%120 Months 7.46% 350.202 43.61% Total 803.022 100.00%Source: Reuters, Credit Libanais Economic Research Unit
March 15, 2018
LEBANESE EQUITIES
Activity on the Beirut Stock Exchange regained its normal pace after having witnessed an exceptional hike last week on the back of 3 enormous block trades on Bank Audi listed shares. Large traded chunks were still recorded this week, involving over 2 million Bank of Beirut listed shares. It is worth noting that the bank will increase its capital through the issuance of new common shares to be offered to non-shareholders, according to the agenda of the upcoming extraordinary general assembly meeting. In this context, the total number of shares changing hands plunged to 2,378,457 shares this week, compared to 30,564,295 shares a week earlier, with traded value sinking to $37.77 million, from nearly $199.01 million a week before. Trades were mainly concentrated in banking stocks, which accounted for 96.58% of weekly traded volume.
The average daily trading volume fell to 475,691 shares this week, from 6,112,859 shares last week. Concurrently, the average daily trading value narrowed to $7.55 million, from $39.80 million a week earlier. Ten gainers and two losers were screened this week, lifting the BSE’s market capitalization up by 0.03% week-on-week to $11.71 billion and the Credit Libanais Aggregate Stock Index (“CLASI”) higher by 0.02% to 1,117.13.
In the real estate sector, trades mainly consisted of Solidere “A” and “B” shares (3.42% of total traded volume), with the price of Solidere “A” increasing by 0.74% to $8.14 and that of Solidere “B” rising by 2.63% to $8.20. In this context, the Credit Libanais Construction Sector Stock Index (“CLCI”) ended the week 1.50% higher at 476.33.
In the banking sector, Bank of Beirut listed shares amassed the highest concentration of trades (89.63% of total traded volume) on a turnover ratio of 12.01%. The Credit Libanais Financial Sector Stock Index (“CLFI”) shed 0.28% on a weekly basis to 1,527.47. This comes as a result of 2.90% contraction in the price of BLOM Bank GDRs to $12.04 and the 2.08% drop in the price of BLOM Bank listed shares to $11.75, which altogether outweighed the 0.16% increase in the price of Bank Audi listed shares to $6.12, the 6.90% hike in the price of Bank Audi GDRs to $6.20, and the 0.63% appreciation in the price of Byblos Bank listed shares to $1.61.
LEBANESE EQUITIES
Weekly Market Watch
SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 14
Credit Libanais Week of Week of Weekly YTDIndices 16-Mar-18 23-Mar-18 % Change % ChangeCredit Libanais AggregateStock Index <.CLASI> 1,116.93 1,117.13 0.02% 2.65%
Credit Libanais FinancialSector Stock Index <.CLFI> 1,531.75 1,527.47 -0.28% 2.44%
Credit Libanais ConstructionSector Stock Index <.CLCI> 469.31 476.33 1.50% 3.69%
.CLASI Credit Libanais Aggregate Stock Index
Value Daily % Chng Daily Net Chng
1,117.13 -0.709% -7.98
Yr.High Year Hi.Date Yr.Low Year.Lo.Date
1,130.99 30-Jan-18 1,088.33 2-Jan-18
Life High Life Hi.Date Life Low Life.Lo.Date
1,801.01 7-Jul-08 836.11 25-Mar-09
Friday, March 23, 2018
1,000
1,050
1,100
1,150
1,200
1,250
23-M
ar-1
7
14-M
ay-1
7
05-J
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26-A
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17-O
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08-D
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29-J
an-1
8
22-M
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8
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Credit Libanais Aggregate Stock IndexWeekly Performance
CLASI
CLASI 0.02%
1,300
1,350
1,400
1,450
1,500
1,550
1,600
1,650
1,700
23-M
ar-1
7
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08-D
ec-1
7
29-J
an-1
8
22-M
ar-1
8
Ind
ex V
alu
e
Credit Libanais Financial Sector Stock IndexWeekly Performance
CLFI
CLFI 0.28%
200
250
300
350
400
450
500
550
600
650
700
23-M
ar-1
7
14-M
ay-1
7
05-J
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26-A
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17-O
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08-D
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7
29-J
an-1
8
22-M
ar-1
8
Ind
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e
Credit Libanais Construction Sector Stock IndexWeekly Performance
CLCI
CLCI 1.50%
The market-cap weighted average price to earnings (P/E) multiple of listed stocks ended its week higher at 7.309x, while the price to book value (P/BV) metric slipped to 0.808x based on the closing prices of Friday’s session.
Weekly Market Watch
SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 15
P/E P/BV
Solidere A $8.14 0.74% 75,709 3.18% $616,963 1.63% 100,000,000 814,000 17.70 0.67 1.62%Solidere B $8.20 2.63% 5,602 0.24% $45,398 0.12% 65,000,000 533,000 17.83 0.67 2.76%BLC Bank $0.93 0.00% - - - - 71,033,333 66,061 5.17 0.51 0.00%BLC Bank Preferred Class "B" $100.00 0.00% - - - - 550,000 55,000 n.a n.a 0.00%BLC Bank Preferred Class "C" $100.00 0.00% - - - - 350,000 35,000 n.a n.a 0.00%BLC Bank Preferred Class "D" $100.00 0.00% - - - - 750,000 75,000 n.a n.a 0.00%Bank Audi - Listed Shares $6.12 0.16% 16,500 0.69% $100,995 0.27% 399,749,204 2,446,465 4.82 0.77 6.43%Bank Audi GDR $6.20 6.90% 12,924 0.54% $80,109 0.21% 119,924,761 743,534 4.88 0.78 6.16%Bank Audi Preferred "G" $100.30 0.00% - - - - 1,500,000 150,450 n.a n.a 0.00%Bank Audi Preferred "H" $100.00 0.00% - - - - 750,000 75,000 n.a n.a -0.60%Bank Audi Preferred "I" $100.10 0.00% - - - - 2,500,000 250,250 n.a n.a 0.15%Bank Audi Preferred "J" $100.00 0.00% 2,010 0.08% $201,000 0.53% 2,750,000 275,000 n.a n.a 0.05%Bank Of Beirut - Listed Shares $18.80 0.00% 2,131,788 89.63% $35,174,502 93.13% 17,746,417 333,633 8.83 1.06 0.00%Bank Of Beirut Priority Shares 2014 $21.00 0.00% 12,000 0.50% $252,000 0.67% 4,762,000 100,002 9.86 1.18 0.00%Bank Of Beirut Preferred "H" $26.00 0.00% - - - - 5,400,000 140,400 n.a n.a 0.39%Bank Of Beirut Preferred "I" $26.00 0.00% - - - - 5,000,000 130,000 n.a n.a 1.96%Bank Of Beirut Preferred "J" $26.00 0.00% - - - - 3,000,000 78,000 n.a n.a 1.36%Bank Of Beirut Preferred "K" $25.75 0.00% - - - - 4,000,000 103,000 n.a n.a 1.58%Byblos Bank - Listed Shares $1.61 0.63% 35,619 1.50% $57,497 0.15% 565,515,040 910,479 6.71 0.63 0.63%Byblos Bank Preferred Class 2008 $102.20 0.10% 500 0.02% $51,105 0.14% 2,000,000 204,400 n.a n.a 0.59%Byblos Bank Preferred Class 2009 $103.00 0.49% 21 0.00% $2,163 0.01% 2,000,000 206,000 n.a n.a 1.98%Byblos Bank GDR $81.00 0.62% 160 0.01% $12,960 0.03% 1,309,078 106,035 6.75 0.63 4.25%BEMO Bank - Listed Shares $1.50 0.00% - - - - 51,400,000 77,100 5.77 0.67 15.38%BEMO Bank Preferred Class 2013 $104.70 0.10% 1,500 0.06% $157,050 0.42% 350,000 36,645 n.a n.a 1.36%BLOM Bank GDR $12.04 -2.90% 78,265 3.29% $949,018 2.51% 73,896,010 889,708 5.52 0.88 -5.20%BLOM Bank Listed Shares $11.75 -2.08% 5,729 0.24% $67,293 0.18% 215,000,000 2,526,250 5.39 0.86 0.95%RYMCO Class "B" $3.30 0.00% - - - - 10,920,000 36,036 15.00 1.69 1.54%Holcim Liban $15.00 1.69% 130 0.01% $1,950 0.01% 19,516,040 292,741 7.69 1.45 3.73%Ciment Blancs Nominal $2.61 0.00% - - - - 9,000,000 23,490 6.87 1.14 16.00%
ClosingWeekly
%Change
Weekly Volume Traded
% of Weekly Volume Traded
% of Weekly Value Traded
Total Listed Shares
Lebanese Equities
Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit
YTD Price Perf.
Note: n.a stands for not applicable
Market Capitalisation
($000)BEIRUT STOCK EXCHANGE
Weekly Value Traded
Previous Last % ChangeValue Traded ($) 199,005,912 37,770,004 -81.02%Volume Traded 30,564,295 2,378,457 -92.22%Average Daily Trading Value ($) 39,801,182 7,554,001 -81.02%Average Daily Trading Volume 6,112,859 475,691 -92.22%Market Cap - BSE ($) 11,708,989,847 11,712,678,379 0.03%Weighted Average P/E 7.264 7.309 0.61%Weighted Average P/BV 0.810 0.808 -0.20%Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit
Activity Analysis
Source: BSE, Credit Libanais Economic Research Unit
0
2
4
6
8
Mar 16, 2018 Mar 23, 2018
7.264 7.309
0.810 0.808
Evolution of Beirut Bourse Comparable Benchmarks
P/E P/BV
LEBANESE EQUITIES
Weekly Market Watch
SOURCE: CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 16
LEBANON’S MAIN INDICATORS
2 011 20 12 2 013 20 14 2 015 2016 20 17 2 018
MACROECONOMIC INDICATORS
GDP (Current Prices) ($ Billion) 40.08 43.87 46.01 47.83* 49.46* 50.46* 52.70* 55.02*
Real GDP Growth Rate 0.92% 2.80% 2.64% 2.00%* 0.82%* 1.00%* 1.50%* 2.00%*
GDP per Capita (Current Prices) ($) 9,144 9,914 10,399* 10,810* 11,178* 11,295* 11,684* 12,082*
Foreign Direct Investment Inflows ($ Billion) 3.14 3.11 2.66 2.91 2.35 2.56
FDI/GDP Ratio 7.84% 7.09% 5.78% 5.84% 4.71% 5.13%
INDUSTRY
Industrial Exports ($ Million) 3,530 3,567 3,384 3,150 2,956 2,527 2,474
Import of Industrial Machinery ($ Million) 239 288 300 269 234 236 257
TOURISM
Total Number of Tourists 1,655,051 1,365,845 1,274,362 1,354,647 1,517,927 1,688,357 1,856,795
Growth in Tax- Free Spending 10% - 6% 4% 8% 2% - 9% 5%
REAL ESTATE
Value of Real Estate Transactions ($ Million) 8,841 9,175 8,708 8,952 8,006 8,482 9,954 1,316 (4)
Number of Real Estate Sales Transactions 82,984 74,569 69,198 70,721 63,386 64,248 73,541 9,819 (4)
Construction Permits (000 sqm) 13,890 12,362 10,527 11,159 10,294 9,935 9,271 1,429 (4)
Cement Delivery (000 tons) 5,550 5,309 5,831 5,517 5,043 5,265 5,149 275 (3)
TRANS PORTATION
Beirut Port: Freight Activity (000 Tons) 6,677 7,225 8,268 8,281 7,240 8,737 8,629 1,361 (4)
Beirut Airport: Number of Passengers (million) 5.65 5.96 6.26 6.57 8.22 7.61 8.24 0.60 (3)
FOREIGN TRADE
Imports ($ Million) 20,158 21,280 21,228 20,494 18,069 18,705 23,130 1,705 (3)
Exports ($ Million) 4,265 4,483 3,936 3,313 2,952 2,977 2,844 283 (3)
Trade Balance ($ Million) (15,893) (16,797) (17,292) (17,181) (15,117) (15,729) (20,287) (1,422) (3)
BALANCE OF PAY MENTS
Net Foreign Assets at the Financial Sector ($ Million) (1,996) (1,537) (1,127) (1,407) (3,354) 1,238 (157) 236.9 (3)
Foreign Assets at BDL ($ Billion) 32.24 35.74 35.29 37.86 37.09 40.71 41.99 43.41 (6)
Gold Reserves at BDL ($ Billion) 14.40 15.31 11.10 10.95 9.85 10.71 11.96 12.20 (6)
PUBLIC FINANCE
Government Expenditures ($ Million) 11,675 13,321 13,640 13,952 13,528 14,867 13,634 (2)
Government Revenues ($ Million) 9,333 9,396 9,420 10,879 9,576 9,923 10,259 (2)
Budget Primary Deficit / Surplus ($ Million) 1,662 (110) (240) 1,307 724 21 1,442 (2)
Total Defic it ($ Million) (2,342) (3,925) (4,220) (3,073) (3,952) (4,944) (3,376) (2)
Defic it / GDP Ratio 5.84% 8.95% 9.17% 6.42% 7.99% 9.80%
Debt Service / GDP Ratio 9.99% 8.25% 8.24% 9.16% 9.46% 9.84%
Net Public Debt ($ Billion) 46.35 49.12 53.18 57.30 61.54 65.42 69.32 69.59 (3)
Gross Public Debt/GDP Ratio 133.89% 131.49% 137.95% 139.16% 142.18% 148.72%* 152.29%* 156.14%*
MONETARY AGGREGATES & INFLATION
M4 ($ Billion) 103.50 110.00 117.41 124.53 131.17 139.20 145.16 145.48 (5)
(M2- M1) ($ Billion) 35.82 39.32 40.56 43.27 46.25 47.95 45.45 46.40 (5)
Monetization Level (M2/GDP Ratio) 99.32% 99.97% 98.97% 97.40% 102.46% 105.06%
Change in CPI (%) 4.27% 4.68% 2.05% - 1.66% - 3.40% 3.14% 5.01% 5.19% (4)
BANKING S YS TEM
Number of Commercial Banks 54 54 56 55 53 50 49 (1)
Number of Branches 948 962 985 1,020 1,039 1,056 1,063 (1)
Total Assets ($ Million) 140,576 151,883 164,821 175,697 185,989 204,311 219,856 222,586 (3)
Total Deposits ($ Million) 117,703 127,657 139,166 147,637 154,951 166,446 172,965 173,558 (3)
Loans to the Private Sector ($ Million) 39,375 43,452 47,381 50,899 54,224 57,180 60,318 59,613 (3)
Customer Loans/ Deposits 33.45% 34.04% 34.05% 34.48% 34.99% 34.35% 34.87% 35.35% (3)
Dollarization Rate 65.92% 64.82% 66.14% 65.71% 64.88% 65.82% 68.72% 68.44% (3)
Exchange Rate (LBP to USD) 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50
Recap of Lebanon's Major Indicators
(1) As at End o f September, 2017, (2) As at End o f November, 2017, (3 ) As at End of January, 2018, (4) As at End of February, 2018, (5) As at M arch 8, 2018, (6 ) As at M id-M arch, 2018
* Figures Reflect IM F Estimates
LEBANON’S RATINGS
Rating Agency Tenor Rating
Long- Te rm B-
Short- Te rm B
Moody's Inve stors Se rvic e Long- Te rm B3
Long- Te rm B-
Short- Te rm B
Source: Fitch Ratings, M oody's Investors Service, S&P Global Ratings
Sta ble
Republic Of Lebanon Sovereign Ratings
Outlook
Sta nda rd & Poor's Globa l Ra tings
Fitc h Ra tings
Sta ble
Sta ble
Rated Banks
Long Term Foreign Currency
Outlook Long Term
IDR
Outlook Long-Term Counterparty Credit Rating
Short-Term Counterparty Credit Rating
Outlook
Bank Audi B3 Stable B- Stable B- C Stable
BLOM Bank B3 Stable - - B- - Stable
Byblos Bank B3 Stable B- Stable - - -
BankMed - - - - B- C Stable
Moody's Investors Service Fitch Ratings
Source: Fitch Ratings, M oody's Investors Service, S&P Global Ratings
S&P Global Ratings
Lebanese Banks' Latest Ratings
Weekly Market Watch
SOURCE: FITCH, MOODY’S, S&P RATINGS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 17
CONTACTS
RESEARCH
Fadlo I. Choueiri, CFA
961-1-608 000 EXT: 1280 Jad Abi Haidar, CFA [email protected] 961-1-608 000 EXT. 1283
Joelle Samaha [email protected] 961-1-608 000 EXT. 1281 Mayda Zaarour [email protected] 961-1-608 000 EXT. 1282
Nagham Abdel Ahad [email protected] 961-1-608 000 EXT. 1284
MONEY MARKETS DESK
Robert Araman
961-1-608 000 EXT. 0760
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Weekly Market Watch
ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231 18