weekly market watch
TRANSCRIPT
EconomicResearchUnitCreditLibanaisHeadquarters
AdliehBeirut,[email protected]
CREDIT LIBANAIS S.A.L.
WeeklyMarketWatch
IssueNo.518
September10th–September16th2016
LLEEBBAANNOONN NEWS
ECONOMIC INSIGHTS
> Independent Insurance Brokers Amass 15% of Annual Insurance Premiums in Lebanon in the Year 2015 1
> Lebanon Receives $120 Million Under LCRP YTD May 2016 2 > New Car Sales Notch 1.27% Lower Y-O-Y by August 2016 3 > Reserves at BDL Reach $52.79 Billion as at Mid-September
2016 4 > Beirut Port Freight Activity Improves by 9.68% Annually by
End of August 5 > Tripoli Port Activity Improves by 11.10% Y-O-Y by July 2016 5 CORPORATE NEWS
> Standard & Poor’s Changes 3 Lebanese Banks’ Outlook to “Stable” 6
MONETARY PERFORMANCE
> Monetary Aggregates 7 > Money Markets 7 LEBANESE EQUITIES
> Lebanese Equities & Credit Libanais Indices 8
Lebanon's Economic & Financial Sector Indicators 10 Lebanon's Ratings 11
INDEPENDENT INSURANCE BROKERS AMASS 15% OF ANNUAL INSURANCE PREMIUMS IN LEBANON IN THE YEAR 2015
Al Bayan Economic magazine reported that independent insurance brokers have managed to attract some 15% ($234 million) of Lebanon’s total annual insurance premiums in the year 2015. LEBANON RECEIVES $120 MILLION UNDER LCRP YTD MAY 2016
The UNDP highlighted that Lebanese public institutions received some $120 million in assistance during the first five months of the year 2016, compared to circa $113 million during the first half of the year 2015. NEW CAR SALES NOTCH 1.27% LOWER Y-O-Y BY AUGUST 2016
New car sales in Lebanon fell by 1.27% y-o-y to 25,562 cars as at the end of the first eight months of 2016, down from 25,891 cars during that same period last year. STANDARD & POOR’S CHANGES 3 LEBANESE BANKS’ OUTLOOK TO “STABLE”
Standard & Poor’s Global Ratings upwardly revised the outlook of 3 Lebanese banks, namely Bank Audi, BLOM Bank, and BankMed from “Negative” to “Stable”.
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
"Forex" Foreign Exchange "LBP" The Lebanese Pound "USD" The United States Dollar "Yen" The Japanese Yen "GBP" The British Pound/ Sterling Pound "CHF" The Swiss Franc "Y-O-Y" Year-On-Year "GDP" Gross Domestic Product "MENA" Middle East and North Africa
“LE” Livre Egyptienne – Egyptian Pound
“SAR” Saudi Arabian Riyal “AED” United Arab Emirates Dirham “BD” Bahraini Dinar
SYNOPSIS OF TERMS
Weekly Market Watch
ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231
LEBANON NEWS
Weekly Market Watch
SOURCE: AL BAYAN ECONOMIC MAGAZINE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 1
INDEPENDENT INSURANCE BROKERS AMASS 15% OF ANNUAL INSURANCE PREMIUMS IN LEBANON IN THE YEAR 2015
“Al Bayan Economic”, the specialized banking, insurance, and shipping pan-Arab monthly magazine, released in its September 2016 issue an article spotting the light on the performance of independent insurance brokers in Lebanon for the year 2015. More specifically, the magazine reported that independent insurance brokers have managed to attract some 15% ($234 million) of Lebanon’s total annual insurance premiums in the year 2015. According to the article, however, the share of independent insurance brokers of the sector’s total written premiums has been shrinking over time, and this amid the fierce competition from brokerage companies that are owned by banking entities or full-fledged insurance companies. The article also displays a list of 91 independent insurance brokers operating in Lebanon according to the amounts locally raised by each in terms of annual premiums in the years 2014 and 2015, with “CAPE” ranking first ($23.00 million in 2014 and $25.00 million in 2015) for yet another year in a row, followed by “Gras Savoye Liban” ($20.20 million in 2014 and $20.41 million in 2015) and “ACAIR” ($14.50 million in 2014 and $15.00 million in 2015) on a respective basis. The table below depicts the name of the top 20 independent insurance brokers operating in Lebanon in terms of annual premiums in the years 2014 and 2015 as per “Al Bayan Economic”:
Year 2014 Year 20151 CAPE 23,000 25,0002 Gras Savoye Liban 20,200 20,4053 ACAIR 14,500 15,0004 Agence Générale de Courtage d'Assurance (AGCA) 19,330 14,9905 Nassif Assurances 9,930 14,6706 Addison Bradley 7,600 8,5007 FCR 5,350 6,7308 Bathish Insurance Agency (ABA) 6,000 6,5009 National Brokers Insurance Services (NBA) 4,000 6,13010 Nasr Baz & Partner 5,640 6,00011 Khazaka Insurance Group (KIG) 5,200 5,80012 Ways Insurance 4,510 5,18013 Arab Assurance Advisors (AAA) 4,900 5,14014 Moussawi Insurance Brokerage (MIB) 4,900 4,90015 Mawarid 4,700 4,90016 La Nationale 4,900 4,00017 Talal Chehab 3,300 3,80018 Insurance & Investment Consultant (IIC) 3,385 3,76519 Affrad* 3,600 3,60020 Loyalty* 3,415 3,415
Ranking CompanyAnnual Insurance Premiums
(USD Thouands)
Source: Al Bayan Economic Magazine, Credit Libanais Economic Research Unit* 2014 Figures
0 5,000 10,000 15,000 20,000 25,000
CAPE
Gras Savoye Liban
ACAIR
AGCA
Nassif Assurances
Addison Bradley
FCR
ABA
NBA
Nasr Baz & Partner
25,000
20,405
15,000
14,990
14,670
8,500
6,730
6,500
6,130
6,000
USD Thousands
Annual Insurance Premiums of Top 10 Independent Insurance Brokers in Lebanon in 2015
Source: Al Bayan Economic Magazine, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: UNDP, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 2
LEBANON RECEIVES $120 MILLION UNDER LCRP YTD MAY 2016
The United Nations Development Program (UNDP) recently released its mid-year update of the “Support to Lebanese Public Institutions and Communities Under the Lebanon Crisis Response Plan” report in which it sheds light on the various types of assistance received by Lebanese public institutions under the Lebanon Crisis Response Plan (LCRP) in the wake of the Syrian refugee crisis. In details, the report highlighted that Lebanese public institutions received some $120 million in assistance during the first five months of the year 2016, compared to circa $113 million during the first half of the year 2015. In the same vein, the report further revealed that some 521 additional staff were “seconded or financed” to improve the capacity of public institutions to respond to crises. As far as the breakdown of financial assistance is concerned, the lion’s share ($53.1 million, “44.25%”) went to the Ministry of Education and Higher Education (MEHE) and public schools, followed by Municipalities ($27.7 million “23.08%”), and the Ministry of Energy & Water (MOEW) which was allocated $13.9 million (11.58%) only to name a few. The report further elaborated that through its support to the MEHE and public schools some 375,000 children (197,000 of whom are Lebanese) were provided access to basic education and that the number of refugee children enrolled in public schools has attained 150,000. Health wise, the report indicated that some 214 Primary Health Care centers (PHCs) received maternal health equipment and that some 223 PHCs received acute and chronic diseases medication which benefited a total of 269,000 patients. The report also uncovered that the assistance program enabled the construction/rehabilitation of some 86km of public water supply distribution network, covering a total of 30 municipalities, extending 537,000 vulnerable individuals with access to improved water supply. On the agricultural front, some $2.1 million were disbursed with the aim of promoting food security and productivity. Accordingly, more than 1,600 farmers received training and equipment aiming at increasing agriculture and livestock production.
Public Institution Financial Assistance ($ Million)
Staff Support
Ministry of Education & Higher Education and public schools 53.1 39Municipalities 27.7 71Ministry of Energy & Water 13.9 7Ministry of Public Health and public hospitals 10.3 111Ministry of Social Affairs 9.1 194Ministry of Agriculture 2.1 1Presidency of the Council of Ministers, security forces and other institutions 3.8 98Total 120 521
Assistance to Lebanese Public Institutions under LCRP YTD May 2016
Source: UNDP, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: AIA, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 3
NEW CAR SALES NOTCH 1.27% LOWER Y-O-Y BY AUGUST 2016
According to the monthly statistics published by the Automobile Importers Association (AIA), new car sales in Lebanon reached 3,418 vehicles during the month of August 2016, compared to 3,700 vehicles in July and 3,603 in August 2015. On a cumulative basis, new car sales fell by 1.27% y-o-y to 25,562 cars as at the end of the first eight months of 2016, down from 25,891 cars during that same period last year. This comes as a result of the 3.34% contraction in Japanese car sales to 9,630 vehicles, coupled with some 3.17% drop in the sales of European cars to 5,158 cars and some 6.45% slump in the sales of Chinese cars to 174 vehicles, which altogether outweighed the 0.31% increase in the sales of Korean cars to 8,965 and the 10.62% hike in the sales of American cars to 1,635 units. Japanese cars continued to control the lion’s share of new car sales in Lebanon, amassing alone 37.67% of total volume sales by end of August 2016, followed by Korean (35.07%), European (20.18%), American (6.40%), and Chinese (0.68%) cars. The Korean “KIA” brand recorded total unit sales of 5,056 cars by August 2016, enjoying the highest market share of 19.78%, followed by the Korean “Hyundai” (3,868 cars <15.13%>) and the Japanese “Toyota” (3,552 cars <13.90%>) brands, only to name a few.
Japanese, 37.67%
European , 20.18%
Korean, 35.07%
American, 6.40%
Chinese, 0.68%
Breakdown of New Car Sales up to August 2016
Source: AIA, Credit Libanais Economic Research Unit
- 1,000 2,000 3,000 4,000 5,000 6,000
KIA
Hyundai
Toyota
Nissan
Renault
Mitsubishi
Chevrolet
Suzuki
Mercedes
BMW
5,056
3,868
3,552
2,578
1,258 1,041
1,031 1,097
709 553
Top 10 New Car Sales Brands up to August 2016
Source: AIA, Credit Libanais Economic Research Unit
Aug-2015 Aug-2016 % ChangeJapanese 9,963 9,630 -3.34%Korean 8,937 8,965 0.31%European 5,327 5,158 -3.17%American 1,478 1,635 10.62%Chinese 186 174 -6.45%Total 25,891 25,562 -1.27%
New Car Sales During the Eight-Month Period Ending
Source: AIA, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: BDL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 4
RESERVES AT BDL REACH $52.79 BILLION AS AT MID-SEPTEMBER 2016
The Lebanese Central Bank’s balance sheet conveys some $123.04 million contraction in its foreign assets (foreign currency reserves) portfolio during the first half of September 2016 to $40.61 billion, from $40.73 billion as at end of August. On the other hand, the value of gold reserves at BDL improved by some $58.29 million to $12.18 billion mimicking the upturn in gold prices as fears of a possible interest rate hike by the Fed receded. On an annual basis, foreign assets at BDL came in 4.99% higher than the $38.68 billion reading reported in mid-September 2015. Similarly, the value of gold reserves appreciated by around $1.99 billion (19.53%) year-on-year when compared to the $10.19 billion figure booked at mid-September of last year. Overall, total reserves (foreign currency and gold) at BDL increased by $3.92 billion annually to $52.79 billion, up from $48.87 billion a year before. These reserves cover around 142.49 months of debt service, and constitute more than 4.73 folds the principal value of foreign and local currency debt that matures in 2016, and 83.08% & 71.94% of Lebanon’s gross and net public debt on a respective basis:
BDL’s balance sheet contracted by $0.24 billion during the first half of September to $103.46 billion, on the back of the 1.25% decrease in BDL’s securities portfolio to $25.58 billion coupled with some 0.12% dip in the value of total reserves to $52.79 billion which outweighed the 0.22% increase in loans to local financial sector to $5.18 billion others. In a related note, the share of gold and foreign currency reserves at BDL increased to 51.02% of the Central Bank’s total assets by mid-September 2016, up from 50.96% as at end of August of the same year, yet still lingered behind the 53.49% level reported in the same period in 2015.
$ BillionMid
September 2010
Mid September
2011
Mid September
2012
Mid September
2013
Mid September
2014
Mid September
2015
Mid September
2016Gold 11.70 16.62 16.35 12.08 11.40 10.19 12.18Foreign Assets 31.31 31.89 35.09 36.05 38.34 38.68 40.61Total Reserves 43.01 48.51 51.44 48.13 49.75 48.87 52.79Source: Banque Du Liban, Credit Libanais Economic Research Unit
Total Reservesas a % of Year 2016 Short Term Debt* 473.84%as a % of Gross Public Debt (1) 71.94%as a % of Net Public Debt (1) 83.08%In months of Debt Service (2) 142.49
(1) As at End of July 2016(2) Average Monthly Debt Service as at End of April 2016Source: ABL, MOF, Credit Libanais Economic Research Unit
* Due to the unavailability of data on projected interest payments for the year 2016, this figure only includes principal repayments on Eurobond Securities and Treasury Bills
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
MidSeptember
2010
MidSeptember
2011
MidSeptember
2012
MidSeptember
2013
MidSeptember
2014
MidSeptember
2015
MidSeptember
2016
11.7016.62 16.35
12.08 11.4010.19
12.18
31.31 31.8935.09 36.05
38.34 38.6840.61
Evolution of Total Reserves at Banque Du Liban
Gold Foreign Assets
Source: Banque Du Liban, Credit Libanais Economic Research Unit
USD Billion
$ BillionMid
September 2015
End of August 2016
Mid September
2016
Bi-Weekly (% change)
Y-O-Y (% change)
Total Reserves 48.87 52.85 52.79 -0.12% 8.02%Securities Portfolio 16.66 25.90 25.58 -1.25% 53.53%Loans to Public Sector 0.00 0.00 0.00 - -Loans to Local Financial Sector 4.74 5.17 5.18 0.22% 9.28%Valuation Adjustment 0.00 0.00 0.00 0.00% 0.00%Other Assets 20.84 19.56 19.69 0.64% -5.54%Fixed Assets 0.24 0.22 0.22 0.08% -9.26%Total Assets 91.36 103.71 103.46 -0.24% 13.25%Currency in Circulation Outside BDL 2.88 3.31 3.38 1.98% 17.20%Financial Sector Deposits 73.85 82.40 81.43 -1.17% 10.26%Public Sector Deposits 5.49 6.63 7.14 7.66% 29.92%Valuation Adjustment 4.50 6.62 6.71 1.29% 49.00%Other Liabilities 1.24 1.25 1.31 4.61% 5.56%Capital Accounts 3.39 3.50 3.50 0.00% 3.26%Total Liabilities 91.36 103.71 103.46 -0.24% 13.25%Source: Banque Du Liban, Credit Libanais Economic Research Unit
Total Reserves51.02%
Securities Portfolio24.72%
Loans to Public Sector0.00%
Loans to Local Financial Sector
5.01%
Valuation Adjustment
0.00%
Other Assets19.03%
Fixed Assets0.21%
Breakdown of BDL's Balance Sheet as at Mid September 2016
Source: BDL, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: BEIRUT PORT, TRIPOLI PORT, AL BAYAN MAGAZINE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 5
BEIRUT PORT FREIGHT ACTIVITY IMPROVES BY 9.68% ANNUALLY BY END OF AUGUST
Beirut Port freight activity improved on a monthly basis in August to 762.5 thousand tons up from 738 thousand tons in July. On a cumulative basis, freight activity appreciated by 9.68% year-on-year to 5,932 thousand tons by August 2016 up from 5,409 thousand tons in the same period last year. In parallel, the number of vessels expanded by 17.90% annually to 1,390 up to August, from 1,179 vessels a year before, with the number of containers increasing by 0.78% to 770,205. In the same vein, the number of imported cars via the Beirut Port added 716 cars annually to 69,617, from 68,901 cars during the first eight months of 2015. Consequently, Beirut Port revenues rose by 1.12% y-o-y to $160.54 million by August from $158.76 million by August in the same period a year earlier. TRIPOLI PORT ACTIVITY IMPROVES BY 11.10% Y-O-Y BY JULY 2016
Freight activity via the port of Tripoli improved to just over 143 thousand tons during the month of July 2016, from around 119 thousand tons in June. On a cumulative basis, Tripoli Port freight activity showed an 11.10% y-o-y increase to 1,002 thousand tons as at the end of the first seven months of 2016, compared to 902 thousand tons during that same period last year. This stellar performance can be attributed to the closing of the Nassib border crossing between Syria and Jordan since April 2015, severing as such the last land export route for Lebanese producers and forcing them to rely instead on maritime exports. The number of vessels also rose by 18.62% annually to 465 by July, up from 392 vessels a year before. On the other hand, the number of imported cars via the Tripoli Port fell by 8.28% on a yearly basis to 2,936, compared to 3,201 cars YTD July 2015. Consequently, port-related revenues (excluding VAT and customs) inched 16.41% higher y-o-y to around $8.80 million, compared to $7.56 million at end of July 2015.
Tripoli Port
Indicators Jul-2015 Jul-2016 Y-O-Y % Change
Freight Activity (000 Tons) 902 1,002 11.10%
Number of Vessels 392 465 18.62%
Number of Imported Cars 3,201 2,936 -8.28%
Port-Related Revenues ($ Million) 7.56 8.80 16.41%
For the Seven-Month Period Ending
Source: Port of Tripoli, Al Bayan Economic Magazine, Credit Libanais Economic Research Unit
0
1000
2000
3000
4000
5000
6000
August 2012 August 2013 August 2014 August 2015 August 2016
4,798
5,492 5,557 5,4095,932
Thousand Tons
Evolution of Cumulative Freight Activity in Beirut Port
Source: Beirut Port, Credit Libanais Economic Research Unit
Aug-15 Aug-16 % ChangeFreight Activity (000 Tons) 5,409 5,932 9.68%Number of Vessels 1,179 1,390 17.90%Number of Imported Cars 68,901 69,617 1.04%Number of Containers 764,240 770,205 0.78%
Revenues ($ Million) 158.76 160.54 1.12%
For the Eight-Month Period EndingPort of BeirutIndicators
Source: Beirut Port, Credit Libanais Economic Research Unit
Weekly Market Watch
SOURCE: S&P GLOBAL RATINGS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 6
STANDARD & POOR’S CHANGES 3 LEBANESE BANKS’ OUTLOOK TO “STABLE”
Standard & Poor’s (S&P) Global Ratings, the international rating agency, upwardly revised the outlook of 3 Lebanese banks, namely Bank Audi, BLOM Bank, and BankMed from “Negative” to “Stable” in its September 6, 2016 rating update. On the other hand, the agency affirmed the long-term counterparty credit ratings of the three banks at “B-” and kept the short-term counterparty credit ratings for each of Bank Audi and BankMed unchanged at “C”. S&P attributed its outlook revision for the 3 banks to its recent amendment of Lebanon’s sovereign outlook from “Negative” to “Stable”, which was triggered by the agency’s opinion that the Lebanese banking sector will continue to attract deposits at a pace that meets the financing needs of the government. More specifically, S&P had expected deposits’ growth to surpass the 4% mark in 2016, representing a critical source of financing to the government’s gross borrowing needs (around 26% of GDP) and the country’s gross external financing needs (89% of GDP or 151% of current account receipts) for that particular year. The agency highlighted, however, that in spite of the stringent risk-control strategies and geographic diversification of all three banks, they remain highly exposed to the local operating environment. The agency also commented that the three banks suffer from a high exposure to the sovereign, which constrains their ratings to that of the sovereign.
CORPORATE NEWS
Bank Rating Class Rating OutlookLong-Term Counterparty Credit Rating B- StableShort-Term Counterparty Credit Rating CLong-Term Counterparty Credit Rating B- StableShort-Term Counterparty Credit Rating -Long-Term Counterparty Credit Rating B- StableShort-Term Counterparty Credit Rating C
Source: S&P, Credit Libanais Economic Research Unit
Bank Audi
BLOM Bank
BankMed
MONETARY AGGREGATES
All monetary aggregates ended the week of September 1, 2016 on a positive note. In details, the overall money supply, “M4”, soared by LBP 1,326.39 billion on a weekly basis to LBP 204,193 billion, noting that the non-banking sector Treasury bills portfolio dropped by LBP 35 billion. In parallel, Lebanese-pound denominated deposits and currency in circulation, “M1”, rallied by LBP 772.26 billion week-on-week to LBP 9,657 billion on the back of some LBP 516 billion hike in demand deposits and some LBP 256 billion expansion in money in circulation. Local currency term deposits, “M2”, also gained a sharp LBP 974.46 billion on a weekly basis, and registered a 5.65% year-on-year increase to LBP 81,378 billion. Consequently, private sector term and saving deposits denominated in LBP (“M2- M1”) edged higher to LBP 71,722 billion, with deposits denominated in foreign currencies (“M3–M2”) firming at LBP 111,673 billion. MONEY MARKETS
The September 8 Treasury bill auction raised some LBP 371.209 billion ($246.24 million), compared to 723.146 billion ($479.70 million) in the auction of the previous week.
Subscriptions were majority (67.84%) concentrated in the five-year to maturity T-bonds, followed by the one-year (18.45%) and three-month (13.71%) tenure bills.
Consequently, the weighted average yield on Lebanese Pound Treasury bills stood at 6.17% in the auction of September 8. The yields on the three-month, one-year, and five-year to maturity Treasury securities remained flat at 4.44%, 5.35%, and 6.74% respectively.
MONETARY PERFORMANCE
Weekly Market Watch
SOURCE: BDL, REUTERS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 7
3 Months
6 Months
12 Months
24 Months
36 Months
60 Months
84 Months
120 Months
180 Months
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
0 1 2 3 4 5 6 7 8 9 10
On The Run Yield Curve
Lebanese Treasury Bills 3 Months 6 Months 12 Months 24 Months 36 Months 60 Months 84 Months 120 Months 180 MonthsTreasury Yield 4.44% 4.99% 5.35% 5.84% 6.50% 6.74% 7.08% 7.46% 7.90%
Mone y Supply
LBP Billion
M1 8 ,8 8 5 9 ,6 5 7 8 .6 9 %
M2 8 0 ,4 0 4 8 1,3 7 8 1.2 1%
M3 19 1,6 9 0 19 3 ,0 5 1 0 .7 1%
M4 2 0 2 ,8 6 7 2 0 4 ,19 3 0 .6 5 %
M2 - M1 7 1,5 19 7 1,7 2 2 0 .2 8 %
M3 - M2 111,2 8 6 111,6 7 3 0 .3 5 %Source: Banque Du Liban, Credit Libanais Economic Research Unit
August 2 5 , 2 0 16 Se pte mbe r 1, 2 0 16 % Cha nge
6,000
26,000
46,000
66,000
86,000
August 25,2016
September 1,2016
202,867 204,193191,690 193,051
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
3 Months 4.44% 50.880 13.71%12 Months 5.35% 68.503 18.45%60 Months 6.74% 251.826 67.84% Total 371.209 100.00%Source: Reuters, Credit Libanais Economic Research Unit
September 8, 2016
LEBANESE EQUITIES
Activity on the Beirut Stock Exchange crawled sluggishly this week after having witnessed numerous block trades on several banking stocks during the previous week. In fact, the number of shares changing hands plunged to 699,964 shares this week, down from 9,543,678 shares last week, with value traded sinking to $7.46 million, from $71.31 million a week before. The contribution of banking sector stocks to total weekly traded volume stood at 98.51%. In parallel, the average daily trading volume fell to 233,321 shares this week, from 1,908,736 shares last week. Similarly, the average daily trading value narrowed to just below $2.49 million, from $14.26 million a week earlier. Three gainers and six losers were screened this week, lifting the BSE’s market capitalization up by 0.28% week-on-week to $11.06 billion and the Credit Libanais Aggregate Stock Index (“CLASI”) higher by 0.34% to 1,080.16. In the real estate sector, trades mainly consisted of Solidere “A” and “B” shares (1.46% of total traded volume), with the price of Solidere “A” increasing by 1.33% to $9.15 and that of Solidere “B” rising by 0.89% to $9.10. Consequently, the Credit Libanais Construction Sector Stock Index (“CLCI”) ended its week up by 2.47% at 522.01. In the banking sector, BLOM Bank preferred shares Class 2011 amassed the highest concentration of trades (67.30% of total traded volume) on a turnover ratio of 2.36%. The Credit Libanais Financial Sector Stock Index (“CLFI”) inched 0.15% lower this week to 1,436.30 amid the 0.80% drop in the price of Bank Audi GDRs to $6.20 and the 0.62% depreciation in the price of Byblos Bank listed shares to $1.61.
LEBANESE EQUITIES
Weekly Market Watch
SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 8
Credit Libanais Week of Week of Weekly YTDIndices 9-Sep-16 16-Sep-16 % Change % ChangeCredit Libanais AggregateStock Index <.CLASI> 1,076.45 1,080.16 0.34% 1.15%
Credit Libanais FinancialSector Stock Index <.CLFI> 1,438.45 1,436.30 -0.15% 3.60%
Credit Libanais ConstructionSector Stock Index <.CLCI> 509.43 522.01 2.47% -7.91%
.CLASI Credit Libanais Aggregate Stock Index
Value Daily % Chng Daily Net Chng
1,080.16 0.442% 4.76
Yr.High Year Hi.Date Yr.Low Year.Lo.Date
1,115.09 6-Apr-16 1,065.48 9-Mar-16
Life High Life Hi.Date Life Low Life.Lo.Date
1,801.01 7-Jul-08 836.11 25-Mar-09
Friday, September 16, 2016
1,000
1,020
1,040
1,060
1,080
1,100
1,120
1,140
16-S
ep-1
5
07-N
ov-1
5
29-D
ec-1
5
19-F
eb-1
6
11-A
pr-1
6
02-J
un-1
6
24-J
ul-1
6
14-S
ep-1
6
Ind
ex V
alu
e
Credit Libanais Aggregate Stock IndexWeekly Performance
CLASI
CLASI 0.34%
1,300
1,320
1,340
1,360
1,380
1,400
1,420
1,440
1,460
1,480
16-S
ep-1
5
07-N
ov-1
5
29-D
ec-1
5
19-F
eb-1
6
11-A
pr-1
6
02-J
un-1
6
24-J
ul-1
6
14-S
ep-1
6
Ind
ex
Val
ue
Credit Libanais Financial Sector Stock IndexWeekly Performance
CLFI
CLFI 0.15%
450
470
490
510
530
550
570
590
610
630
650
16-S
ep-1
5
07-N
ov-1
5
29-D
ec-1
5
19-F
eb-1
6
11-A
pr-1
6
02-J
un-1
6
24-J
ul-1
6
14-S
ep-1
6
Ind
ex V
alu
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Credit Libanais Construction Sector Stock IndexWeekly Performance
CLCI
CLCI 2.47%
The weighted average price to earnings (P/E) and price to book (P/BV) multiples of listed stocks ended their week higher at 10.399x and 0.843x respectively on Friday.
LEBANESE EQUITIES
Weekly Market Watch
SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 9
P/E P/BV
Solidere A $9.15 1.33% 4,167 0.60% $37,991 0.51% 100,000,000 $915,000 17.26 0.52 -17.27%Solidere B $9.10 0.89% 6,079 0.87% $55,103 0.74% 65,000,000 $591,500 17.17 0.51 -17.80%BLC Bank $1.69 0.00% - - - - 51,033,333 $86,246 8.45 0.68 -0.59%BLC Bank Preferred Class "A" $100.50 0.00% - - - - 400,000 $40,200 n.a n.a 0.50%BLC Bank Preferred Class "B" $100.50 0.00% - - - - 550,000 $55,275 n.a n.a -1.95%BLC Bank Preferred Class "C" $100.00 0.00% - - - - 350,000 $35,000 n.a n.a -0.99%Bank Audi - Listed Shares $6.20 0.00% 2,144 0.31% $13,293 0.18% 399,749,204 $2,478,445 6.14 0.87 2.48%Bank Audi GDR $6.20 -0.80% 2,144 0.31% $13,293 0.18% 114,988,117 $712,926 6.14 0.87 3.33%Bank Audi Preferred "F" $100.50 -0.50% 1,746 0.25% $175,473 2.35% 1,500,000 $150,750 n.a n.a -1.18%Bank Audi Preferred "G" $100.00 -0.10% 2,500 0.36% $250,000 3.35% 1,500,000 $150,000 n.a n.a -0.99%Bank Audi Preferred "H" $101.00 -0.10% 800 0.11% $80,800 1.08% 750,000 $75,750 n.a n.a -0.49%Bank Of Beirut - Listed Shares $18.80 0.00% - - - - 17,746,417 $333,633 10.93 1.27 0.00%Bank Of Beirut Priority Shares 2014 $21.00 0.00% - - - - 4,762,000 $100,002 12.21 1.42 0.00%Bank Of Beirut Preferred "H" $25.50 0.00% - - - - 5,400,000 $137,700 n.a n.a -3.77%Bank Of Beirut Preferred "I" $25.65 0.00% 780 0.11% 20,007 0.27% 5,000,000 $128,250 n.a n.a -3.21%Bank Of Beirut Preferred "J" $25.65 0.00% - - - - 3,000,000 $76,950 n.a n.a -0.39%Byblos Bank - Listed Shares $1.61 -0.62% 4,840 0.69% $7,832 0.10% 565,515,040 $910,479 8.94 0.75 0.00%Byblos Bank Preferred Class 2008 $101.00 0.00% - - - - 2,000,000 $202,000 n.a n.a -0.20%Byblos Bank Preferred Class 2009 $100.30 -0.20% 520 0.07% $52,142 0.70% 2,000,000 $200,600 n.a n.a -0.30%Byblos Bank GDR $80.00 0.00% - - - - 1,309,078 $104,726 8.89 0.74 0.00%BEMO Bank - Listed Shares $1.72 0.00% - - - - 51,400,000 $88,408 8.60 1.06 -9.47%BEMO Bank Preferred Class 2013 $100.00 0.00% - - - - 350,000 $35,000 n.a n.a 0.00%BLOM Bank GDR $10.15 0.00% 170,000 24.29% $1,710,715 22.93% 73,896,010 $750,045 11.67 0.89 4.10%BLOM Bank Listed Shares $10.00 0.00% 33,000 4.71% $330,000 4.42% 215,000,000 $2,150,000 11.49 0.88 6.38%BLOM Bank Preferred Class 2011 $10.00 0.00% 471,044 67.30% $4,710,440 63.14% 20,000,000 $200,000 n.a n.a -1.48%RYMCO Class "B" $3.25 0.00% - - - - 10,920,000 $35,490 14.13 1.67 0.62%Holcim Liban $14.90 10.13% 200 0.03% $2,980 0.04% 19,516,040 $290,789 15.1 1.29 2.62%Ciment Blancs Bearer $2.70 0.00% - - - - 6,000,000 $16,200 8.71 1.40 -30.77%Ciment Blancs Nominal $3.10 0.00% - - - - 3,000,000 $9,300 10.00 1.61 0.00%
Note: n.a stands for not applicable
Market Capitalisation
($000) YTD Price
Perf.
Weekly Volume Traded
Lebanese Equities
BEIRUT STOCK EXCHANGE
Weekly Value Traded
Total Listed Shares
Weekly %Change
Closing
Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit
% of Weekly Volume Traded
% of Weekly Value Traded
Previous Last % ChangeValue Traded ($) 71,312,734 7,460,068 -89.54%Volume Traded 9,543,678 699,964 -92.67%Average Daily Trading Value ($) 14,262,547 2,486,689 -82.56%Average Daily Trading Volume 1,908,736 233,321 -87.78%Market Cap - BSE ($) 11,029,506,896 11,060,664,314 0.28%Weighted Average P/E 10.310 10.399 0.86%Weighted Average P/BV 0.839 0.843 0.47%Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit
Activity Analysis
Source: BSE, Credit Libanais Economic Research Unit
0
2
4
6
8
10
12
Sep 9, 2016 Sep 16, 2016
10.310 10.399
0.839 0.843
Evolution of Beirut Bourse Comparable Benchmarks
P/E P/BV
LEBANON’S MAIN INDICATORS
Weekly Market Watch
SOURCE: BDL, ABL, MOF, IMF, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 10
2 0 0 9 20 10 2 0 11 20 12 2 0 13 2 0 14 2 0 15 2 0 16
MACROECONOMIC INDICATORS
GDP ($ Billion) 35.14 38.01 40.08 44.10 47.60 49.94* 51.17* 52.80*
Real GDP Growth Rate 10.30% 8.00% 0.90% 2.80% 2.50% 2.00%* 1.00%* 1.00%*
GDP Per Capita ($) 8,274 8,756 9,144 9,966 10,655 11,073* 11,237* 11,484*
Net Foreign Direct Investment ($ Billion) 4.84 4.96 3.40 2.30 3.79
FDI/GDP Ratio 13.77% 13.05% 11.79% 7.86% 12.71%
INDUSTRY
Industrial Exports ($ Million) 2,595 3,291 3,530 2,952 3,076 3,150 2,956 634 (1)
Import of Industrial Machinery ($ Million) 199 227 239 288 300 269 234 68 (1)
TOURISM
Total Number of Tourists 1,851,081 2,167,989 1,655,051 1,365,845 1,274,362 1,354,647 1,517,927 955,813 (5)
Growth in Tax- Free Spending 13% 21% 10% - 6% 4% 8% 2% - 14% (4)
REAL ESTATE
Value of Real Estate Transactions ($ Million) 6,958 9,479 8,841 9,175 8,708 8,952 8,006 4,674 (5)
Number of Real Estate Sales Transactions 83,465 94,202 82,984 74,569 69,198 70,721 63,386 34,736 (5)
Construction Permits (000 sqm) 11,509 15,187 13,980 12,362 10,527 11,164 10,294 5,860 (5)
Cement Delivery (000 tons) 4,897 5,227 5,550 5,309 5,831 5,517 5,043 2,499 (4)
TRANSPORTATION
Beirut Port: Freight Activity (000 Tons) 5,769 6,469 6,677 7,225 8,268 8,281 7,240 5,932 (6)
Beirut Airport: Number of Passengers (million) 4.74 5.55 5.65 5.96 6.26 6.57 8.22 4.16 (5)
FOREIGN TRADE
Imports ($ Million) 16,242 17,964 20,158 21,280 21,228 20,494 18,069 10,842 (5)
Exports ($ Million) 3,484 4,253 4,265 4,483 3,936 3,313 2,952 1,634 (5)
Trade Balance ($ Million) (12,758) (13,711) (15,893) (16,797) (17,292) (17,181) (15,117) (9,208) (5)
BALANCE OF PAYMENTS
Net Foreign Assets at the Financial Sector ($ Million) 7,899 3,325 (1,996) (1,537) (1,127) (1,407) (3,354) (1,774) (4)
Foreign Assets ($ Billion) 28.30 30.85 32.24 35.74 35.29 37.86 37.09 40.61 (8)
PUBLIC FINANCE
Government Expenditures ($ Million) 11,388 11,336 11,675 13,321 13,640 13,952 13,528 4,958 (2)
Government Revenues ($ Million) 8,428 8,414 9,333 9,396 9,420 10,879 9,576 3,325 (2)
Budget Primary Defic it / Surplus ($ Million) 3,380 1,203 1,662 (110) (240) 1,307 724 (1,095) (2)
Total Defic it ($ Million) (2,960) (2,894) (2,342) (3,925) (4,220) (3,073) (3,952) (1,633) (2)
Defic it / GDP Ratio 8.42% 7.61% 5.84% 8.90% 8.87% 6.14% 7.26%
Debt Service / GDP Ratio 11.49% 10.85% 9.99% 8.21% 7.96% 8.75% 8.60%
Net Public Debt ($ Billion) 44.11 45.01 46.35 49.12 53.18 57.30 61.54 63.54 (5)
Gross Public Debt/GDP Ratio 145.57% 138.39% 133.89% 130.80% 133.36% 133.28% 139.08%
MONETARY AGGREGATES & INFLATION
M4 ($ Billion) 87.08 97.31 103.50 110.00 117.41 124.53 131.17 135.45 (7)
(M2- M1) ($ Billion) 31.14 35.66 35.82 39.32 40.56 43.27 46.25 47.58 (7)
Monetization Level (M2/GDP Ratio) 97.35% 103.46% 99.32% 99.44% 95.68% 97.34% 101.74%
Change in CPI (%) 4.20% 6.19% 4.27% 4.68% 2.05% - 1.66% - 3.40% - 0.48% (5)
BANKING SYSTEM
Number of Commercial Banks 53 54 54 54 56 55 53
Number of Branches 885 912 948 962 985 1,020 1,039
Total Assets ($ Million) 115,250 128,925 140,576 151,883 164,821 175,697 185,989 190,927 (5)
Total Deposits ($ Million) 96,821 108,601 117,703 127,657 139,166 147,637 154,951 158,297 (4)
Loans to the Private Sector ($ Million) 28,374 34,929 39,375 43,452 47,381 50,899 54,224 56,067 (5)
Customer Loans/ Deposits 29.31% 32.16% 33.45% 34.04% 34.05% 34.48% 34.99% 35.42% (5)
Dollarization Rate 64.46% 63.24% 65.92% 64.82% 66.10% 65.71% 64.88% 64.87% (5)
Net Profit - After Tax ($ Million) 1,429 1,838 1,743 1,620
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
* Figures Reflect IM F Estimates
(1) As at End of M arch, 2016, (2) As at End of April, 2016, (3) As at End of M ay, 2016, (4) As at End of June, 2016, (5) As at End of July, 2016, (6) As at End of August, 2016, (7) As at September 1, 2016
Recap of Lebanon's Major Indicators
(8) As at M id-September, 2016
LEBANON’S RATINGS
Weekly Market Watch
SOURCE: S&P, MOODY’S, FITCH, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 11
Rating Agency Tenor Rating
Long- Te rm B-
Short- Te rm B
Moody's Inve stors Se rvic e Long- Te rm B2
Fitc h Ra tings Long- Te rm B-
Short- Te rm B-
Source: S&P Global Ratings, M oody's Investors Service, Fitch Ratings
Stable
S table
Ne ga tive
Republic Of Lebanon Sovereign Ratings
Outlook
Sta nda rd & Poor's Globa l Ra tings
Rated Banks
Long Term Foreign Currency
Financial Strength
Outlook Long Term
IDR
Outlook Long-Term Counterparty Credit Rating
Short-Term Counterparty Credit Rating
Outlook
Bank Audi B2 E+ Negative B- Stable B- C Stable
BLOM Bank B2 E+ Negative - - B- - Stable
Credit Libanais - - - - - - - -
Byblos Bank B2 E+ Negative B- Stable - - -
BBAC - - - - - - - -
Fransabank - - - - - - - -
BankMed - - - - - B- C Stable
S&P Global Ratings
Lebanese Banks' Latest Ratings
Moody's Investors Service Fitch Ratings
Sources: M oody's Investors Service, Fitch Ratings, S&P Global Ratings
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
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 12