The Lebanon Brief
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S A L Your Investment Reference THE LEBANON BRIEF ISSUE 972 Week of June 06-10, 2016 ECONOMIC RESEARCH DEPARTMENT BLOMINVEST Bank Headquarters Bab Idriss, Beirut, Lebanon T (01) 991 784/2 F (+961) 1 991 732 [email protected] www.blom.com.lb TABLE OF CONTENT FINANCIAL MARKETS 1 Equity Market 1 Foreign Exchange Market 3 Money & Treasury Bills Markets 3 Eurobond Market 4 ECONOMIC NEWS 5 Lebanon’s Balance of Payments Deficit Recorded $899.1M by April 2016 5 Lebanon’s debt burden, one of the highest in the world, has been consistently growing as a percentage of GDP and therefore needs to be reset on a more sustainable path. 5 Lebanon’s Fiscal Deficit Broadened by 36% Y-O-Y to $1.44B in Q1 2016 6 Lebanon’s Commercial Banks’ Assets Ticked up by 1% (Y-t-D) by April 2016 6 The Number of Airport Passengers Reached a 5 Year High by May 7 CORPORATE DEVELOPMENTS 8 BLC Bank Announces 2015’s Dividends 8 BEMO Bank Announces Distribution of 2015’s Dividends 8 FOCUS IN BRIEF 9 Middle East Airlines: Resilient As Its Cedar Emblem 9 This report is published for information purposes only. The information herein has been compiled from, or based upon sources we believe to be reliable, but we do not guarantee or accept responsibility for its completeness or accuracy. This document should not be construed as a solicitation to take part in any investment, or as constituting any representation or warranty on our part. The consequences of any action taken on the basis of information contained herein are solely the responsibility of the recipient. The Lebanon Brief ISSUE 972 Week of June 06-11, 2016 S A L Page 1 of 10 FINANCIAL MARKETS Equity Market Stock Market As we expected, activity on the Beirut Stock Exchange 10/06/2016 03/06/2016 % Change (BSE) retreated this week with the BLOM Stock Index BLOM Stock Index* 1,147.82 1,155.17 -0.64% (BSI) declining by 0.64% to 1,147.82 points. This was Average Traded Volume 122,681 178,679 -31.34% also translated by a narrower market capitalization, Average Traded Value 1,016,637 1,558,467 -34.77% which stood at $9.48B by the end of this week down *22 January 1996 = 1000 from $9.54B last Friday. In addition, trading activity BLOM Stock Index slowed down over the week with the daily average traded volume going down from 178,679 shares worth 1200 HI: 1,192.56 $1.56B to 122,681 worth $1.02B this week. 1180 On a comparative scale, the BSI was outperformed by many of its regional peers such as the Morgan Stanley 1160 emerging index (MSCI), the S&P AFE40 and the S&P Pan Arab Composite LargeMidCap Index which respectively 1140 rose by 3.42%, 1.85% and 1.75%. In the Arab world, the Lebanese and Tunisian stock 1120 markets were the sole losers this week with the latter LO: 1,108.49 recording a drop of 1.40% from the previous week. 1100 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 In contrast, Dubai, Qatar and Abu Dhabi were the Banking Sector week’s best performers after posting weekly gains of 3.31%, 3.19% and 2.97%, respectively. Mkt 10/06/2016 03/06/2016 % Change BLOM (GDR) BSE $10.20 $10.25 -0.49% Financial stocks dominated this week’s trades grasping BLOM Listed BSE $9.90 $9.96 -0.60% 84.33% of the total traded value, while the real estate and industrial sectors took the remaining shares of BLOM (GDR) LSE $10.25 $10.35 -0.97% 15.39% and 0.28%, respectively. Audi (GDR) BSE $6.00 $6.00 0.00% Audi Listed BSE $6.00 $6.00 0.00% In the banking sector, BLOM listed shares lost a weekly Audi (GDR) LSE $5.95 $6.12 -2.78% 0.60% to $9.90, whereas its GDRs recorded a 0.49% Byblos (C) BSE $1.65 $1.64 0.61% slip from last week to $10.20. On the contrary, Byblos Byblos (GDR) LSE $75.00 $75.00 0.00% common stocks marginally improved from last week’s Bank of Beirut (C) $18.80 $18.80 0.00% BSE price of $1.64 to close at $1.65. BLC (C) BSE $1.69 $1.69 0.00% BEMO (C) BSE $1.75 $1.75 0.00% As for the BLOM Preferred Shares Index (BPSI), it revealed a weekly drop of 0.08% to 104.16 points. This has resulted from the 0.10% and 0.99% weekly declines in the prices of Audi preferred shares class “F” Mkt 10/06/2016 03/06/2016 % Change and Byblos preferred shares class 09 to $100.20 and Banks’ Preferred 104.16 104.24 -0.08% $100.00, respectively. However, BLOM preferred 2011 Shares Index * Audi Pref. F BSE $100.20 $100.30 -0.10% shares registered another weekly gain and rose from Audi Pref. G BSE $100.10 $100.10 0.00% $10.05 last week to $10.10 by the end of this week. Audi Pref. H BSE $100.10 $100.10 0.00% Byblos Preferred 08 BSE $100.20 $100.20 0.00% In the real estate sector, Solidere class “A” and “B” Byblos Preferred 09 BSE $100.00 $101.00 -0.99% shares decreased by 2.85% and 3.44% to $9.56 and Bank of Beirut Pref. I BSE $25.25 $25.25 0.00% $9.54, respectively. Bank of Beirut Pref. H BSE $25.25 $25.25 0.00% Bank of Beirut Pref. J BSE $25.25 $25.25 0.00% On the London Stock Exchange (LSE), the GDRs of BLOM Preferred 2011 BSE $10.10 $10.05 0.50% Solidere, BLOM and Audi lost 3.10%, 0.97% and 2.78% BEMO Preferred 2013 BSE $100.50 $100.50 0.00% to $9.69, $5.95 and $10.25, respectively. * 25 August 2006 = 100 The Lebanon Brief ISSUE 972 Week of June 06-11, 2016 S A L Page 2 of 10 Real Estate In the industrial sector, HOLCIM shares witnessed a 1.04% drop this week to $14.31. Mkt 10/06/2016 03/06/2016 % Change Solidere (A) BSE $9.56 $9.84 -2.85% The sluggish performance of the BSE is expected to Solidere (B) BSE $9.54 $9.88 -3.44% continue in the coming weeks; unless a positive Solidere (GDR) LSE $9.69 $10.00 -3.10% development on the political front took place. Manufacturing Sector Mkt 10/06/2016 03/06/2016 % Change HOLCIM Liban BSE $14.31 $14.46 -1.04% Ciments Blancs (B) BSE $3.00 $3.00 0.00% Ciments Blancs (N) BSE $3.10 $3.10 0.00% Retail Sector Mkt 10/06/2016 03/06/2016 % Change RYMCO BSE $3.23 $3.23 0.00% ABC (New) OTC $27.00 $27.00 0.00% The Lebanon Brief ISSUE 972 Week of June 06-11, 2016 S A L Page 3 of 10 Foreign Exchange Market Demand for the Dollar in the Lebanese Forex Market remained Lebanese Forex Market unchanged over the past week as the value of the dollar steadied 10/06/2016 03/06/2016 % Change at $/LP 1,513.75-1,514.25 with a mid-price of $/LP 1,514. Euro / Dollar 1.1302 1.1149 1.37% Foreign assets (excluding gold) of the Central Bank increased Sterling / Dollar 1.4441 1.4430 0.08% 0.59% since the beginning of the year to $37.31B by May 2016. Dollar / Swiss Franc 0.9651 0.9914 -2.65% The dollarization ratio of private sector deposits fell from 64.88% Dollar / Yen 106.91 108.84 -1.77% in December 2015 to 64.73% in April 2016. NEER Index** 166.19 167.14 -0.57% By Friday 10th of June, 2016, 1:23 pm Beirut time, the euro *Close of GMT 09:00+2 appreciated against the dollar-pegged LP as the exchange rate **Nominal Effective Exchange Rate; Base Year Jan 2006=100 **The unadjusted weighted average value of a country’s currency relative to all major rose by 1.37%, over the last week, rising from €/LP 1,680.71 to currencies being traded within a pool of currencies. The NEER represents the approximate €/LP 1,703.78. As for the Nominal Effective Exchange Rate (NEER), relative price a consumer will pay for an imported good. it lost a weekly 0.57% to 166.19 points, registering a 1.31% year- to-date decrease. Nominal Effective Exchange Rate (NEER) Given the weaker dollar, the gold prices edged higher from $1,236.52/ounce at last Friday to $1,269.86/ounce this week. 173 The dollar lost momentum over the past week given Janet Yellen’s 170 statement that the Federal Reserve will wait for the economic 167 picture to be less mixed before hiking interest rates. 164 161 158 155 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Money & Treasury Bills Markets During the week ending May 26, broad Money M3 increased by LP 397B ($263.49M) to reach LP 189,526B ($125.72B). M3 registered a 4.77% yearly growth and a 1.57% year-to-date uptick. Likewise, M1 rose by LP 95B ($62.74M) over the mentioned period, due to the LP 198B ($131.34M) increase in demand deposits which Money Market Rates outweighed the LP 103B ($68.33M) decrease in money in circulation.