The LEBANON WEEKLY MONITOR - images.mofcom.gov.cnimages.mofcom.gov.cn/lb/201303/20130308175425246.pdf · Bank Audi sal - Audi Saradar Group - Group Research Department - Bank Audi

1Week 09 February 25 - March 01, 2013

FEBRUARY 25 - MARCH 01, 2013

WEEK 09

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

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Corporate Banking

Khalil Debs(961-1) [email protected]

Marwan Barakat(961-1) [email protected]

Jamil Naayem(961-1) [email protected]

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

Fadi Kanso(961-1) [email protected]

Nathalie Ghorayeb(961-1) [email protected]

Sarah Borgi(961-1) [email protected]

Marc Harb(961-1) [email protected]

Nivine Turyaki(961-1) [email protected]

LEBANON MARKETS: WEEK OF FEBRUARY 25 - MARCH 01, 2013

The LEBANON WEEKLY MONITOR

Economy___________________________________________________________________________p.2 CENTRAL BANK COINCIDENT INDICATOR REVEALS ECONOMIC SLOWDOWN During 2012, economic conditions proved to be more or less difficult on account of a generally cloudy environment, as shown by the BDL's average coincident indicator, though Lebanon continues to escape recessionary trap. Also in this issuep.3 Fiscal deficit soars along with a spike in public salary expenditures p.4 Tourism activity initiates the year 2013 with an ongoing downward path

Surveys___________________________________________________________________________p.5 LEBANON’S TRAVEL AND TOURISM INDUSTRY TO GENERATE A TOTAL OF US$ 11.1 BILLION IN 2013 The World Travel & Tourism Council (WTTC) estimated that the travel & tourism (T&T) industry’s direct contribution to the Lebanese economy would reach US$ 4.1 billion in 2013, up by 1.8% from 2012. Also in this issuep.6 Beirut’s hotel occupancy declines at the start of 2013

Corporate News___________________________________________________________________________p.7 LEBANON INKS US$ 348 MILLION CONTRACT WITH DANISH-GERMAN CONSORTIUM FOR NEW POWER PLANTS Lebanon’s Energy Ministry has concluded a US$ 348 million agreement with a Danish-German consortium to construct new power plants in Jiyeh and Zouk, Lebanon’s two biggest power plants according to newswires.

Also in this issuep.7 Solidere targets project expenditures of circa US$ 200 million in next few yearsp.7 Renovated Jiyeh Marina to be launched in May 2013p.8 EuroMena III to be launched by the end of 2013 p.8 Geitaoui hospital expands its premises

Markets In Brief___________________________________________________________________________p.9 STATUS-QUO MOOD PREVAILS ACROSS ALL LEBANESE CAPITAL MARKETSLebanese capital markets saw this week a balanced activity on the FX market, a shy activity on the equity market that was coupled with stability in prices, and an expansion in spreads on the bond market. In details, demand and supply forces were balanced in relatively moderate volumes on the FX market, which kept the BDL on the sidelines, while the LP/US$ interbank rate closed at LP 1,501-LP 1,503. The BDL’s latest bi-monthly balance sheet ending 28th of February 2013 showed that foreign assets rose by US$ 539 million during the second half of February to reach US$ 36 billion at end-February. On the equity market, a slowdown in activity was observed, with the total trading limited to US$ 1.9 million versus an average weekly of US$ 3.3 million since the beginning of the year 2013 and US$ 7.8 million in 2012. As to bond market, a local and foreign activity was observed on medium to long-term papers. The average spread expanded by 13 bps to 339 bps.



WEEK 09

ECONOMY_____________________________________________________________________________CENTRAL BANK COINCIDENT INDICATOR REVEALS ECONOMIC SLOWDOWN

During 2012, economic conditions proved to be more or less difficult when compared to those seen in 2011 on account of a generally cloudy environment, exacerbated by the ongoing conflicts in neighboring countries. Indeed, the Central Bank’s average coincident indicator, a gauge of economic activity, reported a practical stagnation in 2012 following a rise of 2.5% recorded in 2011. On the overall, the Lebanese economy went through a net slowdown in 2012 but seems to have avoided a net contraction.

A detailed look shows that the practical stagnation of the average coincident indicator in 2012 was mainly attributed to its performance during the second half of the year. In fact, it reported an annual growth of 2.5% in the first half of the year and then a contraction of 1.8% in the second half of the year. A look by quarter shows that the average coincident indicator’s performance was mostly affected by the results seen in the third quarter of 2012. Indeed, after posting a growth 3.7% and 1.2% in the first and second quarter of 2012, the average coincident indicator contracted by 2.8% in the third part of the year on account of multiple politico-security developments which however eased with the visit of the Pope in September. Accordingly, the decline of the coincident indicator somewhat alleviated to 0.9% in the final quarter of 2012. The quantity theory of money likewise supports the low growth assumption in 2011. The average yearly increase in Money Supply (7.0%) was coupled with a net contraction in velocity (-5.0%), leaving an average price inflation of 5.7% and a slow output growth.

The IMF forecasts for 2013 show that the year ahead will not be a year of growth but will be another year of stability amidst continuing regional uncertainties. Growth is indeed forecasted at 2.5% in 2013, i.e a relatively low rate similar to the one witnessed in 2012 (2.0%). Such a growth, resulting from the sluggishness of private investment and the resilience of private consumption, is still not in the red, which presumes the country will continue to avoid the recessionary trap of negative growth rates.

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

LEBANON'S ECONOMIC ACTIVITY



WEEK 09

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

LEBANON'S FISCAL DEFICIT (FIRST 10M OF THE YEAR, US$ MILLION)

_____________________________________________________________________________FISCAL DEFICIT SOARS ALONG WITH A SPIKE IN PUBLIC SALARY EXPENDITURES

The latest available statistics released by the Ministry of Finance showed that Lebanon’s fiscal deficit rose by 76.8% year-on-year to US$ 2.7 billion in the first ten months of 2012. Noteworthy is that the government’s ratified wage increase has boosted public sector salary outlays to US$ 2.4 billion up to October 2012, nearly US$ 465 million (+24%) higher than the total reported in the corresponding period of 2011.

Fiscal expenditures were up by 15.0% year-on-year to US$ 10.8 billion in the first ten months of 2012, mainly boosted by current expenditures (88% of total expenditures). Current expenditures increased by 12.3% year-on-year in the aforesaid period of 2012 mainly on account of the rise in personnel cost and miscellaneous current expenditures. The former, which account for nearly 39% of current expenditures, went up by 29.7% year-on-year driven mainly by the rise in salaries, wages and related items (+ 24.0%). As to miscellaneous current expenditures (23 % of total current expenditures), they were up by 26.3% mainly due to the 31.2% rise in transfers to the national electricity company. Also, total fiscal expenditures were to a lesser extent boosted by those related to the treasury which edged up by 71.2% year-on-year.

As to fiscal revenues, they progressed by 3.1% year-on-year to reach US$ 8.1 billion in the first ten months of 2012 the bulk of which stemmed from the resources classified within budget transactions. The latter, making up circa 95% of the overall fiscal revenues, posted an increase of 3.5% annually mainly driven by the 5.1% progress in tax revenues. All components of this category reported an annual rise and the rates came as follows: miscellaneous tax revenues (+ 8.6% year-on-year), customs revenues (+ 3.3%) and VAT revenues (+ 1.5%). Noteworthy is that taxes on income, profits and capital gains increased by 6%, following the minimum wage increase in the private sector and the cost of living adjustment in the public sector, which contributed to the increase in income tax on salaries and wages by circa 20% from 2011.



WEEK 09

______________________________________________________________________________TOURISM ACTIVITY INITIATES THE YEAR 2013 WITH AN ONGOING DOWNWARD PATH

The latest data covering January 2013 showed that the tourism sector is still subjected to the adverse local and regional conditions and consequently, arrivals have sustained their downward path on the back of weaker land travel and a generally frail local environment.

Indeed, the tourism sector, it remains one of the main casualties of the overall jittery situation. According to the latest statistics released by the Ministry of Tourism, the number of tourists went down by 15.4% year-on-year to a total of 81,060 in January 2013, following an annual drop of 2.1% posted in the same period of 2012. Noteworthy is that this downward trend was mainly tied to the weaker arrivals of tourists of Arab origin which account for circa 40% of the total. As a matter of fact, their number edged down by 30.5% year-on-year in January 2013 following an increase of 21.8% reported in the same period of 2012. Such a trend is tied to the impact of the regional developments on land travel and mostly to the announcements issued by several governments within the Arab Gulf region, dissuading their nationals to visit the country since mid-May 2012.

The number of incomers from other parts of the world also reported an annual decline. In fact, arrivals of tourists from Africa, Asia and Oceania weakened annually by 16.9%, 13.4% and 3.0% in January 2013, respectively. A more detailed look shows that the bulk of incomers during the first month of 2013 were those of Iraqi origin (9.5%), followed by the French (8.1%), the Jordanians (8.0%), those from the US (6.9%) and the Saudis (6.3%).

Sources: Ministry of Tourism, Bank Audi Group Research Department

LEBANON'S TOURIST ACTIVITY



WEEK 09

SURVEYS____________________________________________________________________________LEBANON’S TRAVEL AND TOURISM INDUSTRY TO GENERATE A TOTAL OF US$ 11.1 BILLION IN 2013

The World Travel & Tourism Council (WTTC) estimated that the travel & tourism (T&T) industry’s direct contribution to the Lebanese economy would reach US$ 4.1 billion in 2013, up by 1.8% from 2012. When measured against the nominal GDP, it accounted for 9.3% of the economy’s size in 2012, a share that would slightly drop to 9.0% in 2013, as per WTTC. This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services, as well as the activities of the restaurant and leisure industries directly supported by tourists.

Tourism’s direct industry employment in the activities mentioned above will reach 117,500 representing 8.7% of total employment in Lebanon this year, down by 2.1% from 120,000 jobs (9.0% of total employment) in 2012.

The total contribution of travel and tourism to Lebanon’s GDP , including wider effects from investment, the supply chain, and induced income impacts, was at US$ 11.1 billion in 2012 (25.1% of GDP) and is expected to grow by 2.3% to US$ 11.4 billion (24.5% of GDP) in 2013. The total contribution of travel and tourism in the above mentioned category will reach 317,000 jobs in 2013 (23.5 % of total employment), down by 1.8% from 322,500 jobs in 2012 (24.0% of total employment).

On a longer term basis, the direct contribution of travel and tourism to GDP is expected to grow by 5.8% per annum to US$ 7.4 billion (9.6% of GDP) by 2023. Regarding the total contribution, it is forecasted to grow by 6.1% per annum to US$ 20.5 billion by 2023, equivalent to 26.8% of GDP.

DIRECT CONTRIBUTION OF TRAVEL AND TOURISM TO LEBANON'S GDP

Sources: World Travel and Tourism Council, Bank Audi's Group Research Department



WEEK 09

Pertaining to visitor exports, which WTTC defines as spending within the country by international tourists for both business and leisure trips, it reached US$ 8.1 billion in 2012, and is expected to grow by 0.6% in 2013, and by an average of 4.5% per annum till 2023 to US$ 12.6 billion. Travel and tourism is estimated to have attracted capital investment of US$ 1.3 billion in 2012, a total expected to rise by 2.7% in 2013, and by 6.4% per annum by 2023.

In terms of direct contribution to the economy in 2012, Lebanon’s T&T industry ranks 24th among 181 countries with a ratio of 9.3% of GDP, surpassing the global average of 5.2%. It outperformed the following countries within the region: Tunisia (32nd), Egypt (36th) and Jordan (43rd). In terms of total contribution to the GDP in 2012, Lebanon was ranked 25th, with a share of 25.1% of GDP, compared to a global average of 14.1%. With regards to the 2013 expected growth rate of the direct and total contribution, Lebanon took the 125th and 118th positions respectively, lower than the global average of 3.0% in both categories.With regards to employment, the direct industry jobs’ contribution to Lebanon’s employment placed the country 23rd globally with a share surpassing the global average of 5.4% in 2012. Lebanon’s ratio exceeded that of Tunisia (6.6%) and Egypt (5.9%) with these countries ranking globally 37th and 43rd, respectively. In terms of total contribution to employment, Lebanon ranked 25th globally, surpassing the global average of 13.9%.______________________________________________________________________________BEIRUT’S HOTEL OCCUPANCY DECLINES AT THE START OF 2013

Ernst & Young issued its hotel occupancy report covering January 2013 in which it showed that the performance of Lebanon’s hospitality sector was a reflection of the adverse local and regional politico-security developments.

As a matter of fact, the occupancy rate of four and five stars hotels within the capital declined to 49% in the first month of 2013 from a share of 60% in the same period of 2012, a year already considered as a low base. Hotels within the capital were among the few to have posted an annual decline, namely Amman (-18%), Muscat (-4%), and Jeddah (-2%). The occupancy rate within Beirut was the 2nd lowest one among 16 cities within the Middle East. It was followed by that of Cairo (32%), while coming after that of Amman (50%), Makkah (56%) and Manama (57%).

A snapshot of the 16 cities included in the survey showed that the average occupancy rate of hotels remained somewhat close to that seen in the first month of 2012. In fact, four and five stars establishments reported tenancy rates of 64% in the first months of 2013, slightly up from a share of 61% in the same period of 2012.

With regards to the average room rate, that of Beirut declined from US$ 229 in January2012 to US$ 167 in January 2013, equivalent to a yearly contraction of 27.2%. Such a trend was the most significant one, surpassing that of Al Ain (-14.3%) and Manama (-13.2%). The rate of the capital’s hotels was the eleventh highest one in the region. It exceeded that of Amman (US$ 154), Al Ain (US$ 123), and Cairo (US$ 94) while being surpassed by that of Manama (US$ 198), Muscat (US$ 210) and Madina (US$ 206). Out of the 16 cities included in the survey, a total of six reported an annual decline in the room rate while the rest managed to post an increase.

As to the rooms yield, they were on the same path, declining by 41.2% annually to US$ 82 in the first month of 2013 compared with US$ 139 in the same period of 2012. Beirut reported the most significant drop in the region when assessing this indicator. The decline surpassed that of Amman (-20.3%) and that of Abu Dhabi (-7.9%). The yield was the 12th highest one, coming before that of Amman (US$ 77), Sharm El Shaikh (US$ 37), and Cairo (US$ 30) while being surpassed by that of Riyadh (US$ 130), Manama (US$ 114) and Al Ain (US$ 84).



WEEK 09

CORPORATE NEWS_____________________________________________________________________________LEBANON INKS US$ 348 MILLION CONTRACT WITH DANISH-GERMAN CONSORTIUM FOR NEW POWER PLANTS

Lebanon’s Energy Ministry has concluded a US$ 348 million agreement with a Danish-German consortium to construct new power plants in Jiyeh and Zouk, Lebanon’s two biggest power plants according to newswires.

The terms of the agreement signaled that Denmark’s BWSC and Germany’s MAN Diesel will build two plants, with a maximum capacity of 272 megawatts. Lebanese officials indicated that the construction would stretch over a period of up to 18 months, adding that the new plants would run on both fuel and natural gas.

BWSC originated as part of Denmark’s Burmeister & Wain Group and became an independent company in 1980. BWSC is a global provider of tailor-made turnkey power plant. It is an engineering, procurement and construction contractor and an independent power producer. Its activities also include operation, maintenance and rehabilitation of power plants.

The MAN Group is one of Europe's leading commercial vehicle, engine and mechanical engineering companies. MAN is a supplier of trucks, buses, diesel engines, turbomachinery and turnkey power plants. MAN Diesel & Turbo SE, which is based in Germany, is a supplier of large diesel engines and turbomachinery for maritime and stationary applications. ______________________________________________________________________________SOLIDERE TARGETS PROJECT EXPENDITURES OF CIRCA US$ 200 MILLION IN NEXT FEW YEARS

Lebanese construction company Solidere is eyeing expenditures of around US$ 200 million on several projects in the next few years, as per newswires.

Company officials indicated that these projects would include continuing infrastructure works in Beirut’s waterfront, completing the entertainment center and cinemas in the downtown area, as well as works in the Souks and initiating new real estate projects.

The same sources specified that the real estate projects will be set up in the already developed part of Solidere, including Saifi but excluding the waterfront. Also, the company is gearing up to launch a 200,000 square meter project this year.

In parallel, Solidere International is currently seeking growth opportunities in Arab countries, as per company officials. It is currently working on a project in Ajman, UAE. Other plans include a residential tower in Jeddah, as per the same sources._____________________________________________________________________________RENOVATED JIYEH MARINA TO BE LAUNCHED IN MAY 2013

Jiyeh Marina & Resort, owned by a Lebanese businessman, would be launched in its renovated version in May 2013 under the management of budget hotel chain Golden Tulip.

Noteworthy is that the aforesaid chain already has three properties under its operation within Lebanon. They are named as follows: Golden Tulip Hotel De Ville in Sodeco, Golden Tulip Serenada Hamra, and Golden Tulip Galleria in Jnah.

The development of the hotel in Jiyeh cost around US$ 38 million, as per newswires. The overall investment in the project reached US$ 113 million, as per the same sources. The resort now boasts 152 rooms and extensive facilities. It also has two swimming pools, a conference room, and a number of restaurants and wedding venues, as per newswires.



WEEK 09

_____________________________________________________________________________EUROMENA III TO BE LAUNCHED BY THE END OF 2013

The MENA-dedicated private equity fund by Beirut’s Capital Trust Group, termed EuroMena III, would be launched by end-2013, as per official statements. Capital Trust Group is targeting to raise up to US$ 250 million for the new fund.

The fund’s new management would be the same as that of the current EuroMena. Furthermore, it will adopt the same strategy as that of its two predecessors, EuroMena I and II, as per official statements. EuroMena III will target firms in productive sectors, including energy, financial services, food and beverages, pharmaceuticals, information technology, and consumer goods. The investment in target companies would range between US$ 15 million and US$ 30 million.

Investors in the new fund would mostly be the same one as those in EuroMena I and II, with some new entries being envisaged. The minimum commitment to the EuroMena III is US$ 2 million for corporate or institutional investors, and US$ 500,000 for individuals.

EuroMena II had purchased 20% of Egypt's Easy Group, a manufacturer of natural depilatory, wet wipes, and antiseptic products. This investment was the third one in Egypt out of EuroMena II's total of five investments. The other two investments are in Lebanon, with US$ 13.6 million in Khoury Home, a local retailer of home appliances and US$ 20 million in First National Bank.

The US$ 100 million EuroMena II will make one more investment before it becomes fully invested. The last investment might be in Lebanon or Egypt where four investment options are being considered, as per management statements. The investment is expected to be finalized by end-August 2013.

EuroMena’s first fund is now in its exit cycle. The US$ 65 million fund has exited Siniora Food, a Jordan-based industrial firm, earlier this February. The fund, which was fully invested in nine companies by end-2009, has made four exits so far including Beirut-based Sodamco and Intercontinental Bank of Lebanon. The fund has generated more than two times invested capital from the exited investments and aims for a complete exit by end-2013. The initial MENA fund managed by Capital Trust Group was MENAVEST, the US$ 54 million fund which it had founded and liquidated before establishing EuroMena I._____________________________________________________________________________GEITAOUI HOSPITAL EXPANDS ITS PREMISES

Hôpital Libanais-Geitaoui is expanding its premises situated in Ashrafieh to now include a new building adjacent to the existing location. The investment, which would be completed in 2016, would cost circa US$ 20 million, as per newswires.

The same sources added that the expansion would boost the number of beds from its current level of 160 to a total of 275 beds. The new establishment would have an area of 14,000 square meters and boast 13 floors of which five would be underground levels. The building would include a parking for 350 cars.

The new development would generate some 200 new jobs, increasing the number of staff at the hospital to 600, as per newswires.

Also, the new building would feature lecture halls capable of accommodating up to 300 students. In parallel, the hospital will sign a five-year agreement with the Lebanese University’s medical school. According to the terms, the Lebanese University would support the hospital in developing medical services and funding research programs. The hospital will, in turn, enroll faculty students for training. The agreement aims to boost the medical services and increase the academic level of the hospital. There will also be a cooperation between the hospital’s library and the university.



WEEK 09

CAPITAL MARKETS_____________________________________________________________________________MONEY MARKET: STABILITY IN OVERNIGHT RATE AT 2.75%

Given the balanced activity on the foreign exchange market and the abundant local currency liquidity available at commercial banks, the overnight rate stood unchanged at its low official level of 2.75% set by the Central Bank of Lebanon. As to Certificates of Deposits, no subscriptions were made in the 45-day and 60-day categories. Accordingly, total subscriptions since the beginning of the year 2013 stood unchanged at LP 33 billion. Interest rates on the 45-day and 60-day CDs categories remained stable at 3.57% and 3.85% respectively.

At the monetary aggregates level, figures for the week ending 14th of February 2013 released this week showed a growth in local currency deposits of LP 81 billion, as a result of a rise of LP 92 billion in LP time deposits and a fall of LP 11 billion in LP demand deposits week-on-week. Deposits in foreign currencies increased by US$ 208 million. These weekly variations compare to an average weekly rise of LP 8 billion for LP deposits, and an average weekly increase of US$ 23 million for foreign currency deposits since the beginning of the year 2013. Total money supply in its large sense (M4) expanded by LP 312 billion week-on-week. This compared to an average weekly growth of LP 111 billion since the beginning of the year.

On a cumulative basis, money supply in its large sense (M4) grew by LP 2,125 billion since the beginning of the year 2013. This is the result of a rise in local currency denominated time deposits of LP 1,911 billion, an increase in foreign currency deposits of LP 622 billion (the equivalent of US$ 413 million), a contraction in money supply (M1) of LP 957 billion, and a growth in Treasury bills held by the public of LP 549 billion.

_____________________________________________________________________________TREASURY BILLS MARKET: NOMINAL DEFICIT OF LP 165 BILLION

The secondary Treasury bills market continued to see a mere activity on long-term papers during this week, with the CDs swap operation conducted by the Central Bank of Lebanon between LP CDs maturing in 2013 and 2014 and longer-term CDs still capturing all market players’ attention.

At the level of the primary market, the latest auction’s results (February 28, 2013) showed a small increase in the average yield on the three-month category of 1 basis point to reach 4.44%, while the average yields on the six-month and five-year categories remained stable at 4.99% and 6.74% respectively. On the other hand, the auction results for value date 21st of February 2013 released by the Central Bank of Lebanon showed that total subscriptions amounted to LP 171 billion and were distributed as follows: LP 19 billion in the one-year category, LP 16 billion in the two-year category, and LP 136 billion in the three-year category. These compare to maturities of LP 336 billion, resulting in a nominal deficit of LP 165 billion.

INTEREST RATES

Source: Bloomberg



WEEK 09

TREASURY BILLS

Sources: Central Bank of Lebanon, Bloomberg_____________________________________________________________________________FOREIGN EXCHANGE MARKET: US$ 539 MILLION GROWTH IN BDL’S FOREIGN ASSETS

The foreign exchange market saw a balanced activity in moderate volumes during this week. The LP/US$ interbank rate rose slightly from LP 1,501-LP 1,503 on Monday to LP 1,502-LP 1,507 on Tuesday, yet it fell back to its lower bracket towards the end of the week. Meanwhile, the Central Bank of Lebanon remained on the sidelines.

The Central Bank of Lebanon’s latest bi-monthly balance sheet ending 28th of February 2013 showed that foreign assets rose by US$ 539 million during the second half of February, compensating for the US$ 672 million drop seen during the first half of the month, to reach US$ 35.9 billion at end-February. This is mainly driven by a US$ 1,225 million growth in financial sector deposits held at BDL. Accordingly, the Central Bank’s foreign assets covered 83.1% of LP money supply at end-February, with this coverage ratio rising to 117.0% when accounting for gold reserves estimated at US$ 14.7 billion. In addition, the BDL’s foreign assets covered 20.2 months of imports. These ratios reflect the BDL’s strong ability to defend the currency peg and meet demand for foreign currencies should any pressures arise.

EXCHANGE RATES

Source: Bank Audi’s Group Research Department_____________________________________________________________________________STOCK MARKET: NO CHANGE IN PRICE INDEX WEEK-ON-WEEK

The Beirut Stock Exchange witnessed a slowdown in activity during this week. The total trading value was limited to US$ 1.9 million versus US$ 3.9 million in the previous week and an average weekly trading value of US$ 3.3 million since the beginning of the year 2013. The average daily trading value fell from US$ 774 thousand last week to US$ 380 thousand this week, resulting into a 50.8% drop in the trading



WEEK 09

EUROBONDS INDICATORS

Source: Bank Audi’s Group Research Department

AUDI INDICES FOR BSE

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

volume index to close at 16.11. As far as prices are concerned, the BSE price index remained stable at 110.16.

Solidere shares captured 61.4% of activity. Solidere “A” share price rose by 1.6% to US$ 12.48, and Solidere “B” share price increased by 1.0% to close at US$ 12.39. The banking shares accounted for 38.5% of the total trading value. Bank Audi’s “listed” share price edged down by 0.1% to close at US$ 6.74. Bank Audi’s GDR price dropped by 1.4% to US$ 6.80. BLOM’s GDR price nudged up by 0.7% to close at US$ 8.50. Byblos Bank’s “listed” share price fell by 3.0% to US$ 1.60. As to industrial stocks, Holcim’s share price surged by 4.1% to US$ 16.50.

All in all, the Beirut Stock Exchange performed similarly to other emerging markets, as reflected by stability in the S&P Emerging Market Composite Index. Yet, it performed better than other Arabian markets, as shown by a 0.5% decrease in the S&P Pan-Arab Composite Index.

_____________________________________________________________________________BOND MARKET: EXPANSION IN AVERAGE SPREADS

The Eurobond market saw some local activity on long-term papers maturing in 2026 and 2027, while some foreign market players showed demand for papers maturing in 2019 and 2022 that was met by adequate local supply. The average yield declined slightly by two basis points to 4.36%, while the average spread expanded by 13 basis points to 339 basis points within the context of relative stability in Lebanese yields and a drop in international benchmark yields. For instance, the five-year US Treasury yields fell by nine basis points week-on-week to close at 0.75% as investors bet the start of US$ 85 billion in automatic federal spending cuts will hurt the US economic recovery. As to the cost of insuring debt, Lebanon’s five-year CDS spreads hovered between 400 and 430 basis points this week versus 401-428 basis points last week. Finally, it is worth noting that the Central Bank of Lebanon halted this week its selling operations for part of its Eurobonds portfolio.



WEEK 09

INTERNATIONAL MARKET INDICATORS

Sources: Bloomberg, Bank Audi's Group Research Department

___________________________________________________________________________DISCLAIMER

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

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

Documents

The LEBANON WEEKLY MONITOR - images.mofcom.gov.cnimages.mofcom.gov.cn/lb/201303/20130308175425246.pdf · Bank Audi sal - Audi Saradar Group - Group Research Department - Bank Audi