LEBANON WEEKLY MONITOR MAY 10 - MAY 16, 2021 WEEK 20
CONTACTS
Treasury & Capital Markets ______Economy Bechara Serhal p.2 MILD CONTRACTION IN DEPOSITS AND LOANS IN THE FIRST QUARTER AMID RISE IN (961-1) 977421 OFFSHORE LIQUIDITY [email protected] Financial sector figures for the first quarter 2021 show a continuing decline in deposits and loans though at a much less significant pace, a further contraction in interest rates along with a rise in banks’ Private Banking primary liquidity abroad. Toufic Aouad (961-1) 954922 Also in this issue [email protected] p.3 Gross public debt at US$ 97 billion at end-February 2021 p.4 Property market’s sales operations reported a hike of 52% in the first four months of 2021 Corporate Banking Carol Ayat Surveys (961-1) 959675 [email protected] p.5 LEBANON RANKS 98TH GLOBALLY IN THE 2020 POSITIVE PEACE INDEX Marketing and Communications The Institute for Economics and Peace (IEP) published its latest edition of the Positive Peace Report in which it ranked 163 independent nations and territories based on their level of positive peace. In the Jean Traboulsi 2020 index, Lebanon ranked 98th globally with a score of 3.29. (961- 1) 977350 [email protected] Also in this issue p.6 Fitch Solutions holds a bleak outlook for consumer spending over the medium term in Lebanon
______Corporate News p.7 BANK AUDI ISSUES ITS FINANCIAL STATEMENTS FOR YEAR 2020 Bank Audi released its 2020 financial statements highlighting the persisting uncertainties arising from RESEARCH the lasting financial crisis for 16 months now, amid continuing absence of a clear national recovery plan.
Marwan Barakat Also in this issue (961-1) 977409 [email protected] p.8 Byblos Bank’s total assets down to US$ 18 billion at end-March 2021
Salma Saad Baba (961-1) 977346 ______Markets In Brief [email protected] p.9 MARKETS IN BRIEF: STATUS-QUO MOOD GOVERNS BLACK FX MARKET AHEAD OF PLATFORM LAUNCHING Farah Nahlawi With BDL unveiling plans to start negotiating a new mechanism with Lebanese banks whereby they would (961-1) 959747 begin gradually paying off part of FC deposits dating back before October 17, 2021, and following the release [email protected] of a new intermediate circular covering the new FX platform while all eyes remained focused on the “prepaid subsidy card program and subsidy rationalization” draft law, a status-quo mood swayed over the black FX Zeina Labban (961-1) 952426 market ahead of Fitr holidays, while the equity market registered shy price retreats and the bond market [email protected] saw no price change week-on-week. In details, the BDL’s new initiative and circular left a mere impact on FX activity on the parallel market over this short week, with the LP/US$ exchange rate continuing to range Michele Sakha between LP/US$ 12,600 and LP/US$ 12,650. In parallel, the BSE posted shy price declines of 0.5% week-on- (961-1) 977102 week. This was coupled by reduced activity. On the bond market, the international demand observed over [email protected] the past four weeks came to a halt this week, which resulted into across-the-board stability in prices.
LEBANON MARKETS: MAY 10 - MAY 16, 2021
Money Market BSE Equity Market LP Tbs Market Eurobond Market ⬇ LP Exchange Market CDS Market - ⬌⬆ Week 20 May 10 - May 16, 2021 ⬌ 1 Bank Audi sal - Group Research Department - Bank Audi Plaza - Bab Idriss - PO Box 11-2560 - Lebanon⬌ - Tel: 961 1 994 000 - email: [email protected] MAY 10 - MAY 16, 2021 WEEK 20
ECONOMY ______MILD CONTRACTION IN DEPOSITS AND LOANS IN THE FIRST QUARTER AMID RISE IN OFFSHORE LIQUIDITY
Financial sector figures for the first quarter 2021 show a continuing decline in deposits and loans though at a much less significant pace, a further contraction in interest rates along with a rise in banks’ primary liquidity abroad.
While bank assets almost stabilized year-to-date, customer deposits slightly contracted by US$ 2,191 million over the first three months of 2021 (against a much sharper contraction of US$ 9,273 million over the first three months of 2020) to reach a total deposit base of US$ 136.9 billion in March 2021, against US$ 139.1 billion at end-2020, US$ 158.9 billion at end-2019 and US$ 174.3 billion at end-2018. It is worth mentioning that FX deposits contracted by US$ 1,935 million over the first three-month period, while LL deposits declined by US$ 256 million. As such, deposit dollarization inched slightly downward to report 80.2% in March 2021, against 80.4% in December 2020.
Loans to the private sector contracted by US$ 1,965 million over the first three months of 2021 (against a much more significant decline of US$ 4,754 million over the first three months of 2020) to reach a total lending base of US$ 34.2 billion in March 2021, against US$ 36.2 billion at end-2020, US$ 49.8 billion at end-2019 and US$ 59.4 billion at end-2018. It is worth mentioning that FX loans contracted by US$ 1,290 million over the 2021 first three-month period, while LL loans dropped by US$ 675 million. As such, loan dollarization continued its downward descent to report a low of 59.2% in March 2021.
Interest rates continued their declining trend as well. The average US$ deposit rate reported 0.52% in March 2021, against 0.94% in December 2020 and a peak of 6.61% in October 2019. The average LL deposit rate reported 1.96% in March 2021, against 2.64% in December 2020 and a peak of 9.40% in November 2019. As to debtor rates, the average US$ loan rate reported 7.14% and the average LL loan rate reported 8.02% in March 2021.
With respect to liquidity, Lebanese banks liquidity with foreign banks continued its recent ascent, in conformity with BDL circular 154, rising by US$ 173 million in the first quarter 2021 and accumulating a cumulative rise of US$ 504 million since October 2020.
As to shareholders’ equity, it reported a total of US$ 16.9 billion at end-March 2021, against US$ 20.7 billion at end-March 2020. Despite banks’ efforts to increase capital as per BDL requirements, this equity contraction reflects the noticeable bank losses over the period amid significant provisioning needs at large.
LEBANON'S BANKING ACTIVITY
in millions of US$ 2019 2020 Q1-20 Q1-21 Var: Total assets -32,703 -28,739 -8,231 -1,780 % change in assets -13.1% -13.3% -3.8% -0.9% Var: Total deposits -15,418 -19,723 -9,273 -2,191 o.w. LP deposits -13,119 -10,772 -5,093 -256 o.w. FC deposits -2,299 -8,952 -4,180 -1,935 % change in total -8.8% -12.4% -5.8% -1.6% deposits Var: Total credits -9,617 -13,601 -4,754 -1,965 o.w. LP credits -2,710 -959 -404 -675 o.w. FC credits -6,907 -12,642 -4,350 -1,290 % change in total -16.2% -27.3% -9.6% -5.4% credits
Source: BDL, Bank Audi's Group Research Department
Week 20 May 10 - May 16, 2021 2 MAY 10 - MAY 16, 2021 WEEK 20
Finally, a continuation of the balance of payments deficit was reported to reach US$ 847 million in the first three months of 2021, against a deficit of US$ 1,062 million in the 2020 corresponding period. This year’s deficit is driven by a decline in net foreign assets of BDL by US$ 1,854 million, while banks’ net foreign assets rose by US$ 1,007 million over the 2021 three-month period.
______GROSS PUBLIC DEBT AT US$ 97 BILLION AT END-FEBRUARY 2021
The data published by the Ministry of Finance in Lebanon showed that the country’s gross debt reached US$ 96.8 billion at February 2021, up by 1.3% against end-2020.
Domestic debt increased by 1.4% from end-2020 to reach a total of US$ 91.0 billion at February 2021.
Lebanon’s external debt rose by 1.1% from end-2020 to stand at around US$ 36.5 billion at February 2021.
In this context, the public sector deposits at the Central Bank was down negligibly from end-2020 to register US$ 4.5 billion at February 2021.
The public sector deposits at commercial banks picked-up by 1.9% from end-2020 to register US$ 5.6 billion at Feb-2021.
As such, net public debt, which excludes the public sector deposits at the Central Bank and commercial banks from overall debt figures, increased by 1.3% from end-2020 to reach a total of US$ 86.7 billion at Feb-2021.
Net domestic debt amounted to US$ 50.3 billion at February 2021, up by 1.5% from end-2020.
It is worth recalling that Lebanon has defaulted on its foreign currency debt in March 2020 for the first time in the country’s contemporary history.
GROSS PUBLIC DEBT (US$ BILLION)
120 0
6 6 100 0 1 6 1 0 0 0 6 66 6 60 0 1 1 2 6 0 2 0 0 0
20 0
0 0 End-07 End-08 End-09 End-10 End-11 End-12 End-13 End-14 End-15 End-16 End-17 End-18 End-19 End-20 Feb-21
Sources: Ministry of Finance, Bank Audi's Group Research Department
Week 20 May 10 - May 16, 2021 3 MAY 10 - MAY 16, 2021 WEEK 20
______PROPERTY MARKET’S SALES OPERATIONS REPORTED A HIKE OF 52% IN THE FIRST FOUR MONTHS OF 2021
After the Lebanese real estate sector witnessed some stress during the first quarter of this year, figures have hiked in April revealing a positive performance as the sector is somewhat perceived as a safe haven after the economic and financial developments in the country. Still, there is rising reluctance on behalf of property sellers to get paid in Bank checks within the context of the current financial crisis prevailing in the country.
The latest official figures released by the General Directorate of Land Registry and Cadastre in Lebanon covering the first four months of 2021 showed that realty markets reversed last year’s growth and reported an increase in both property transactions and sales activity.
The number of sales operations jumped by a yearly 52.1% from 14,841 sales operations in the first four months of 2020 to 22,580 operations in the first four months of 2021. Respectively, the number of transactions increased from 33,532 in the first four months of 2020 to 46,420 in the same period of this year, a yearly increase of 38.4%.
Sales to foreigners improved by 33.3% year-on-year to reach 316 operations in the first four months of 2021.
The value of property sales transactions was also on an upward path in the first four months 2021. It registered an increase of 36.6% year-on-year to attain a total of US$ 3.5 million during the first four months of 2021. The most significant movements coming were in Bekaa (97.5%) and North (96.1%). The increase in the number of sales operations wasn’t reciprocally reflected on value of sales, where the average sales value went down from US$ 174,923 in the first quarter of 2020 to US$ 157,088 in the first four months of 2021.
Furthermore, property taxes followed the upward trend, moving from US$ 103.5 million in the first four months of 2020 to US$ 172.6 million in the corresponding period of 2021.
LEBANON'S REAL ESTATE MARKET
0,000 61,
60,000 ,1 2 , 0 6, 20 0,000
0,000 , 2
0,000 22, 66 22, 0 1 ,6 1 20,000 1 , 26 1 , 1
10,000
0 4M-17 4M-18 4M-19 4M-20 4M-21
a a a y a a a
Sources: Directorate of Land Registry and Cadastre, Bank Audi's Group Research Department
Week 20 May 10 - May 16, 2021 4 MAY 10 - MAY 16, 2021 WEEK 20
SURVEYS ______LEBANON RANKS 98TH GLOBALLY IN THE 2020 POSITIVE PEACE INDEX
The Institute for Economics and Peace (IEP) published its latest edition of the Positive Peace Report in which it ranked 163 independent nations and territories based on their level of positive peace. In the 2020 index, Lebanon ranked 98th globally with a score of 3.29.
Positive Peace is defined as the attitudes, institutions and structures that create and sustain peaceful societies. The same factors that create lasting peace also lead to many other positive outcomes that societies aspire to, including: thriving economies, better performance on ecological measures and high levels of resilience and adaptability to change.
Other factors that improve with Positive Peace are measures of inclusiveness, wellbeing and happiness. Therefore, Positive Peace can be described as creating an optimal environment for human potential to flourish.
The data used in this report covers the period from 2009 to 2019. As such, it does not include the impact of the COVID-19 pandemic, lockdowns and the global recession that ensued. It will be included in forthcoming editions of the Positive Peace Index (PPI). Positive Peace consists of eight Pillars, but each of these Pillars does not correlate with peace as strongly as the sum of all components, highlighting that the whole is more than the simple sum of its components.
Regionally, the United Arab Emirates ranked first in the region and 34th globally with a score of 2.01. Qatar came in the second position and 43rd globally with a score of 2.26, while Kuwait ranked third in the region and 45th globally with a score of 2.33.
ARAB MENA COUNTRIES 2020 POSITIVE PEACE INDEX Global Rank Global Score United Arab Emirates 34 2.01 Qatar 43 2.26 Kuwait 45 2.33 Oman 53 2.58 Tunisia 58 2.67 Bahrain 60 2.74 Saudi Arabia 65 2.90 Jordan 73 2.95 Morocco 77 2.98 Palestine 92 3.23 Lebanon 98 3.29 Algeria 98 3.29 Djibouti 113 3.48 Egypt 116 3.52 Libya 132 3.67 Mauritania 141 3.84 Iraq 144 3.88 Sudan 154 4.03 Syria 157 4.19 South Sudan 161 4.47 Yemen 162 4.54 Somalia 163 4.63
Sources: The Institute for Economics and Peace, Bank Audi's Group Research Department
Week 20 May 10 - May 16, 2021 5 MAY 10 - MAY 16, 2021 WEEK 20
______FITCH SOLUTIONS HOLDS A BLEAK OUTLOOK FOR CONSUMER SPENDING OVER THE MEDIUM TERM IN LEBANON
As a result of the ongoing impact of the Covid-19 pandemic, the Beirut explosion and soaring inflation, Fitch Solutions holds a bleak outlook for consumer spending over the medium term in Lebanon. Many Lebanese households will only be able to afford essential consumer products and services over the coming years, with non-essential spending unable to gain much ground. Fitch Solutions forecasts around 75% of Lebanese households' budgets will go to essential spending over the 2021-2025 period, similar to countries such as Algeria and Iraq.
The projected impact of Covid-19 and Beirut explosion on consumer spending patterns in Lebanon have been factored into Fitch Solutions’ 2021 forecast.
Fitch Solutions forecasts real growth in household spending to contract by 6.0% in 2021 in real terms. Over the medium-term forecast period, Fitch Solutions forecasts real consumer spending to expand at an annual average rate of 2.0% per year. While in nominal terms, total household spending has increased despite the economic impact of Covid-19, Fitch Solutions does not expect total real household spending to recover to 2019 levels. The 2020 crisis in Lebanon will have a longer-term impact on consumers in the country, leading to a muted growth outlook. In 2020, total household spending is estimated to have reached LP 71.7 trillion (US$ 47.5 billion), while this is forecast to reach LP 212.3 trillion (US$ 23 billion) in 2025.
A key risk to consumer spending over the medium-term forecast period in Lebanon is soaring inflation. As a result of the rapid depreciation of the Lebanese pound against the US dollar on the black market and the potential of the removal/ reduction of subsidies, consumer price inflation (CPI) is estimated to average 84.3% over 2020, and will ease to 78.1% in 2021. CPI in Lebanon is projected to average 24.5% per annum over 2021-2025, well above the pre-COVID average (2015-2019) of 2.9%. Rapidly rising prices of consumer goods and services will mean that many low and middle income households will not be able to afford non- essential products anymore. Even within essential spending segments, such as food and non-alcoholic drinks, Fitch Solutions expects that many households will only be able to afford bare necessities.
As a result of soaring inflation, nominal household spending will grow significantly, at an average annual rate of 72.1%. Nominal household spending will reach LP 212.3 trillion in 2025, up from LP 123.4 trillion in 2021. In US dollar terms, total household spending will increase from US$ 13.7 billion in 2021 to US$ 23.9 billion in 2025. Downside risks exists as investor and consumer confidence will probably remain low and dollar shortages will persist, keeping inflation elevated and eroding incomes and savings.
With the rollout of vaccinations in H121, lockdown measures are expected to ease over the coming months and nonessential retail will reopen, with this aiding a number of non-essential segments that are hardest hit by lockdowns.
However, Fitch Solutions warns of demand-side risks that are emerging among the consumer globally and will likely impact the spending habits of the Lebanese consumer over 2021. Fitch Solutions highlights, however, that these risks will be mostly prevalent among high-income Lebanese households, with low- income households in country unable to afford spending on nonessential items due to high unemployment and soaring inflation.
Week 20 May 10 - May 16, 2021 6 MAY 10 - MAY 16, 2021 WEEK 20
CORPORATE NEWS ______BANK AUDI ISSUES ITS FINANCIAL STATEMENTS FOR YEAR 2020
Bank Audi released its 2020 financial statements highlighting the persisting uncertainties arising from the lasting financial crisis for 16 months now, amid continuing absence of a clear national recovery plan. In addition the crisis is exacerbated by the COVID-19 pandemic, the explosion of the Beirut Port, deepening recession, hyperinflation, and the multitude of exchange rates.
The Bank's management devised a number of measures: US$ 209 million capital increase effected in February 2020. Sale of the Group’s entities in Egypt, Jordan and Iraq and investment in Syria, aggregating proceeds of USD 841 million. A US$ 609 million of normalised net profits generated in 2020, turning into a consolidated net loss of US$ 145 million after accounting certain impairments and other adjustments tied to the crisis.
The bank’s consolidated total assets decreased by US$ 4.1 billion representing 10.4%, to US$ 35.4 billion as at end-2020, from US$ 39.5 billion as at end-2019.
Customers’ deposits declined by 27.3%, standing at US$ 21.5 billion at end-2020 down from US$ 29.6 billion end-2019. Loans and advances declined from US$ 10.3 billion at end-2019 to US$ 6.1 billion at end-2020.
The bank posted net losses of US$ 144.8 million in 2020 versus net losses of US$ 602.1 million in 2019.
Net interest income amounted to US$ 881.1 million in 2020, down by 5.4% from US$ 931.9 million recorded in the same period of the previous year.
Net fees and commission income declined from US$ 143 million in 2019 to record a loss of US$ 520 million in 2020.
Net operating income hiked to reach US$ 337.9 million in 2020 versus a loss of US$ 131 million in 2019.
Total operating expenses declined by 9.7% to reach US$ 480.4 million in 2020 against US$ 532 million by end of 2019, out of which personnel charges reached US$ 270.2 million, 4.2% lower than those reported in end of 2020.
BANK AUDI SAL'S MAJOR BALANCE SHEET AGGREGATES (US$ BILLION)
0 0 2 0 0 0 35.4 39.5 47.2 21.5 29.6 31.9 0 1 6.1 10.3 13.3 2 6 0 0 2 0 21 20 0 a 1 1 0 10 10 0 6 1 0 0 0 End-18 End-19 End-20
Sources: Bank Audi sal
Week 20 May 10 - May 16, 2021 7 MAY 10 - MAY 16, 2021 WEEK 20
______BYBLOS BANK’S TOTAL ASSETS DOWN TO US$ 18 BILLION AT END-MARCH 2021
Byblos Bank published its consolidated unaudited financial statements for the Q1 2021 calculated at the official rate.
The bank posted net profits of US$ 882.9 thousand in the first quarter of 2021, slumped by 88.9% from US$ 8.0 million in the same period of 2020.
Net interest income amounted to US$ 177.8 million in the first three months of 2021, up by 74.4% from US$ 101.9 million recorded in the same period of the previous year.
Net fees and commissions income declined from US$ 21.3 million in the first quarter of 2020 to reach US$ 16.5 million in the same period of this year.
Net operating income decreased by 6.5% to reach US$ 78.5 million in the first three months of 2021.
Total operating expenses went up negligibly to US$ 52.4 million first three months of 2021, of which personnel charges reached US$ 29.4 million, 5.3% lower than those reported in the first three months of 2020, and other operating expenses recorded US$ 19.0 million in the first three quarters of 2021, 13.4% more than those in the same period of the previous year.
The bank’s total assets decreased by 2.2% from US$ 18.8 billion at end-2020 to US$ 18.4 billion at end- March 2021.
Customers’ deposits declined by 2.9%, standing at US$ 14.5 billion at March 2021 down from US$ 14.9 billion end-2020.
Loans and advances declined from US$ 2.6 billion at end-2020 to US$ 2.3 billion at end-March 2021.
TOP TEN COMPANIES BY LIFE INSURANCE PREMIUMS
Figures in US$ million Q1-2020 Q1-2021 Profit and loss items Net Interest Income 101.9 177.8 Net Fees & Commissions Income 21.3 16.5 Net Operating Income 83.9 78.5
Total Operating Expenses 52.3 52.4
Net Profits 8.0 0.88
Source: Byblos Bank
Week 20 May 10 - May 16, 2021 8 MAY 10 - MAY 16, 2021 WEEK 20
CAPITAL MARKETS ______MONEY MARKET: FIRST WEEKLY EXPANSION IN TOTAL RESIDENT DEPOSITS IN NINE WEEKS
The overnight rate didn’t shift its stance, standing at 3% on the money market this week amid ample local currency liquidity at hand, noting that its official rate stays quoted at 1.90%.
In parallel, the latest monetary aggregates released by the Central Bank of Lebanon for the week ending 29th of April 2021 showed that total resident banking deposits registered their first weekly expansion in nine weeks of LP 294 billion. This is mainly attributed to a LP 262 billion rise in total LP resident deposits amid a LP 433 billion increase in LP demand deposits and a LP 171 billion decline in LP saving deposits, while foreign currency resident deposits rose by LP 32 billion (the equivalent of US$ 21 million as per the official rate of LP 1,507.5). Accordingly, total resident banking deposits accumulated contractions of LP 4,234 billion over the first four months of 2021, given a LP 3,152 billion fall in foreign currency resident deposits (the equivalent of US$ 2,091 million as per the official rate), and a LP 1,082 billion decrease in total LP resident deposits.
INTEREST RATES
12/05/21 07/05/21 31/12/20 Overnight rate (official) 1.90% 1.90% 1.90% 7 days rate 2.00% 2.00% 2.00% 1 month rate 2.75% 2.75% 2.75% ⬌ 45-day CDs 2.90% 2.90% 2.90% ⬌ 60-day CDs 3.08% 3.08% 3.08% ⬌ ⬌ ⬌ Source: Bloomberg
______TREASURY BILLS MARKET: NOMINAL WEEKLY SURPLUS OF LP 265 BILLION
The latest Treasury bills auction results for value date 13th of May 2021 showed subscriptions in the three- month category (offering a yield of 3.50%), the one-year category (offering a yield of 4.50%) and the five- year category (offering a coupon of 6.0%).
In parallel, the Treasury bills auction results for value date 6th of May 2021 showed that total subscriptions amounted to LP 385 billion, allocated as follows: LP 13 billion in the six-month category (offering a yield of 4.0%), LP 110 billion in the two-year category (offering a coupon of 5.0%) and LP 262 billion in the ten-year category (offering a coupon of 7.0%). These compare to maturities of LP 120 billion, resulting into a nominal weekly surplus of LP 265 billion.
______FOREIGN EXCHANGE MARKET: LP/US$ EXCHANGE RATE REMAINS STABLE THIS WEEK
The Central Bank governor unveiled this week a new initiative which includes (1) negotiating a new mechanism with Lebanese banks whereby they would begin gradually paying off part of foreign currency deposits dated back before October 17, 2021 on condition of obtaining a legal cover; and (2) launching the new FX platform. Within this context, the Central Bank of Lebanon issued on May 10, 2021 an intermediate circular No. 583 covering the electronic foreign currency trading platform, by which it requested licensed money changers “to buy and sell foreign currencies according to demand and supply forces”. This came in amendment of a previous basic circular issued on June 10, 2020, which required “FX operations to be in line with a dollar price range agreed with the Central Bank”.
Week 20 May 10 - May 16, 2021 9 MAY 10 - MAY 16, 2021 WEEK 20
TREASURY BILLS
12/05/21 07/05/21 31/12/20 3-month 3.50% 3.50% 3.50% 6-month 4.00% 4.00% 4.00% 1-year 4.50% 4.50% 4.50% ⬌ 2-year 5.00% 5.00% 5.00% ⬌ 3-year 5.50% 5.50% 5.50% ⬌ 5-year 6.00% 6.00% 6.00% ⬌ 7-year - - 6.50% ⬌ 10-year - 7.00% 7.00% ⬌ Nom. Subs. (LP billion) 385 122 Short-term (3&6 mths) 13 - Medium-term (1&2 yrs) 110 - Long-term (3 yrs) - 20 Long-term (5 yrs) - - Long-term (7 yrs) - 102 Long-term (10 yrs) 262 Maturities 120 191 Nom. Surplus/Deficit 265 -69
Sources: Central Bank of Lebanon, Ministry of Finance
Yet, the new BDL’s initiative and circular did not alleviate pressures on the parallel FX market over this short week, with the LP/US$ exchange rate continuing to range between LP/US$ 12,600 and LP/US$ 12,650 on Wednesday, with no change relative to the previous week. This comes within the context of a continuing of confidence crisis and growing concerns over impending subsidy cuts, while all eyes remained focused on the “prepaid subsidy card and subsidy rationalization” draft law.
EXCHANGE RATES
12/05/21 07/05/21 31/12/20 LP/US$ 1,507.50 1,507.50 1,507.50 LP/£ 2,130.10 2,099.19 2,048.54 LP/¥ 13.86 13.81 14.61 ⬌⬇ LP/SF 1,666.48 1,661.16 1,706.67 ⬇ LP/Can$ 1,247.31 1,237.89 1,178.66 ⬇ LP/Euro 1,829.20 1,822.12 1,851.21 ⬇ ⬇ Source: Bank Audi’s Group Research Department
______STOCK MARKET: SHY WEEKLY EQUITY PRICE RETREATS
The Beirut Stock Exchange registered shy price declines over this three-day week, as reflected by a 0.5% retreat in the price index. Three out of seven traded stocks posted price falls, while three stocks recorded price gains and one stock saw no price change week-on-week. Ciments Blancs Nominal shares led the fall on the BSE this week, plunging by 13.5% to US$ 4.50, followed by Bank Audi’s listed shares with -8.7% to US$ 2.41 and Solidere “B” shares with -0.3% to US$ 24.86. In contrast, Holcim Liban’s share price jumped by 12.1% to US$ 17.94, followed by Bank Audi’s GDRs with +1.5% to US$ 2.0 and Solidere “A” shares with +1.5% to US$ 25.10, while Byblos Bank’s “listed” share price remained stable at US$ 0.93.
Week 20 May 10 - May 16, 2021 10 MAY 10 - MAY 16, 2021 WEEK 20
As far as trading volumes are concerned, the BSE total turnover amounted to US$ 3.4 million during this three-day week as compared to US$ 13.7 million over the past four-day week, noting that Solidere shares captured 93.4% of activity.
AUDI INDICES FOR BSE
22/1/96=100 12/05/21 07/05/21 31/12/20 Market Cap. Index 402.67 404.86 302.49 Trading Vol. Index 51.46 153.18 86.63 ⬇ Price Index 84.53 84.99 63.50 ⬇ Change % -0.54% 0.17% 4.60% ⬇ 12/05/21 07/05/21 31/12/20 ⬇ Market Cap. $m 9,553 9,605 7,176 No. of shares traded (Exc. BT) 285,213 848,346 650,340 ⬇ Value Traded $000 (Exc. BT) 3,455 13,716 5,834 ⬇ o.w. : Solidere 3,225 12,096 5,565 ⬇ Banks 193 1,619 264 ⬇ Others 37 0.7 5 ⬇ ⬆ Sources: Beirut Stock Exchange, Bank Audi’s Group Research Department
______BOND MARKET: QUIET MOOD SWAYS OVER LEBANON’S EUROBOND MARKET AHEAD OF FITR HOLIDAYS
A quiet mood swayed over Lebanon’s Eurobond market ahead of Fitr holidays, as the international demand, which persisted over the past four weeks, came to a halt during this three-day week. This resulted into a relative stability in prices across the yield curve, except for shy price gains on sovereigns maturing in 2022, 2023 and 2037. That being said, prices of papers maturing between 2021 and 2037 ranged between 12.63 cents per US dollar and 14.0 cents per US dollar on Wednesday as compared to 12.63-13.63 cents per US dollar at the end of last week. On a cumulative basis, Lebanese sovereigns accumulated price contractions of 0.13 pt to 1.38 pt since the beginning of the year.
EUROBONDS INDICATORS
12/05/21 07/05/21 31/12/20 Total tradable size $m 32,364 32,364 32,364 o.w.: Sovereign bonds 31,314 31,314 31,314 Average Yield 71% 72% 57% ⬌ Average Life 6.72 6.72 7.04 ⬌⬇ Yield on US 5-year note 0.80% 0.73% 0.37%
⬌⬆
Source: Bank Audi’s Group Research Department
Week 20 May 10 - May 16, 2021 11 MAY 10 - MAY 16, 2021 WEEK 20
INTERNATIONAL MARKET INDICATORS
Weekly Year-to-date 14-May-21 7-May-21 31-Dec-20 change change EXCHANGE RATES YEN/$ 109.35 108.59 103.32 0.7% 5.8% $/£ 1.410 1.398 1.367 0.8% 3.1% $/Euro 1.214 1.217 1.222 -0.2% -0.6% STOCK INDICES DOW JONES INDUSTRIAL 34,382.13 34,777.76 30,606.48 -1.1% 12.3% AVERAGE S&P 500 4,173.85 4,232.60 3,756.07 -1.4% 11.1% NASDAQ 13,429.98 13,752.24 12,888.28 -2.3% 4.2% CAC 40 6,385.14 6,385.51 5,551.41 0.0% 15.0% Xetra Dax 15,416.64 15,399.65 13,718.78 0.1% 12.4% FT-SE 100 7,043.61 7,129.71 6,460.52 -1.2% 9.0% NIKKEI 225 28,084.47 29,357.82 27,444.17 -4.3% 2.3% COMMODITIES (in US$) GOLD OUNCE 1,843.43 1,831.24 1,898.36 0.7% -2.9% SILVER OUNCE 27.42 27.45 26.40 -0.1% 3.9% BRENT CRUDE (per barrel) 68.71 68.28 51.80 0.6% 32.6% LEADING INTEREST RATES (%) 1-month Libor 0.10 0.10 0.14 0.00 -0.04 US Prime Rate 3.25 3.25 3.25 0.00 0.00 US Discount Rate 0.25 0.25 0.25 0.00 0.00 US 10-year Bond 1.63 1.58 0.91 0.05 0.72
Sources: Bloomberg, Bank Audi's Group Research Department
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