LEBANON WEEKLY MONITOR APRIL 19 - APRIL 25, 2021 WEEK 17
______Economy p.2 CONTRACTION IN DEPOSITS AND LOANS AT A MUCH LESS SIGNIFICANT PACE OVER THE FIRST TWO-MONTH PERIOD Monetary/banking sector figures for the first two months of 2021 were released this week. They show CONTACTS a further widening in the balance of payments deficit to reach US$ 751 million in the first two months Treasury & Capital Markets of 2021, against a deficit of US$ 505 million in the 2020 corresponding period.
Bechara Serhal Also in this issue (961-1) 977421 p.3 Value of cleared checks down by 38% in the first quarter of 2021 [email protected] p.4 Slowdown in the activity of the property market in first quarter of 2021 Private Banking Surveys Toufic Aouad ______(961-1) 954922 p.5 DE-TAXED TOURISTIC SPENDING DOWN BY A YEARLY 44% IN THE FIRST QUARTER OF [email protected] 2021 Corporate Banking As per Global Blue, the firm that reimburses VAT to tourists at Lebanese border points, purchases by tourists in Lebanon whose VAT was claimed and which gives a fair view about tourists’ shopping Carol Ayat trends, contracted by 44% during the first quarter of 2021 compared to the same period of 2020. The (961-1) 959675 number of transactions retreated by a yearly 79% in the first quarter of this year. [email protected] Also in this issue p.6 Progress on the political front needed for real progress on the economic front in Lebanon, as per Emirates NBD
______Corporate News p.7 FATTAL TO SELL PFIZER VACCINE TO COMPANIES STARTING IN JULY Fattal Healthcare entered the discussion to make vaccines available to private sector companies for a fee. Fattal will be the second supplier following Malia Group that started offering Russia’s Sputnik V vaccine.
RESEARCH Also in this issue p.7 New alliance between UAE's ALEC and Lebanon's BUTEC to target industrial and environmental projects Marwan Barakat (961-1) 977409 p.7 US startup Ramp, co-founded by a Lebanese, valued at US$ 1.6 billion [email protected] p.7 Lebanese startup Ostaz (Synkers) acquired by Inspired Group p.8 Wave bets on electric bikes in Lebanon Salma Saad Baba p.8 SwitchMed backs sustainable firms in 5 Mediterranean countries (961-1) 977346 [email protected] ______Markets In Brief Farah Nahlawi (961-1) 959747 p.9 STATUS-QUO MOOD REIGNS OVER BLACK FX MARKET, AWAITING NEW PLATFORM [email protected] Amid lingering domestic political bickering and continuous cabinet deadlock, and along international warnings against exhausting BDL’s FX reserves and its detrimental effect on the Lebanese economy, and Zeina Labban while all eyes remained focused on the upcoming new FX platform, a status-quo mood reigned over the (961-1) 952426 black FX market, while the equity and bond markets followed an upward trajectory this week. In details, [email protected] the exchange rate continued to hover around LP/US$ 12,000, awaiting the new FX platform (Sayrafa) aimed to increase the FX market efficiency and curb currency swings. This came along continuous calls to ration Michele Sakha subsidies in order to preserve remaining dwindling FX reserves. In parallel, the BSE registered a 2.5% rise (961-1) 977102 in prices week-on-week, which brought year-to-date price gains to 33%, mainly on hedging against crisis. [email protected] Finally, the bond market saw weekly price expansions of 0.25 pt to 0.63 pt, helped by some international bid, to reach 11.75-12.50 cents per US dollar on Friday. LEBANON MARKETS: APRIL 19 - APRIL 25, 2021
Money Market BSE Equity Market LP Tbs Market Eurobond Market ⬆ LP Exchange Market CDS Market - ⬌⬆ ⬆ Week 17 April 19 - April 25, 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] APRIL 19 - APRIL 25, 2021 WEEK 17
ECONOMY ______CONTRACTION IN DEPOSITS AND LOANS AT A MUCH LESS SIGNIFICANT PACE OVER THE FIRST TWO-MONTH PERIOD
Monetary/banking sector figures for the first two months of 2021 were released this week. They show a further widening in the balance of payments deficit to reach US$ 751 million in the first two months of 2021, against a deficit of US$ 505 million in the 2020 corresponding period. This year’s deficit is driven by a decline in net foreign assets of BDL by US$ 1,088 million, while banks’ net foreign assets rose by US$ 337 million over the 2021 two-month period.
At the banking sector level, sector statistics 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$ 288 million over the first two months of 2021 (against a much sharper contraction of US$ 7,151 million over the first two months of 2020) to reach a total deposit base of US$ 138.8 billion in February 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$ 678 million over the first two-month period, while LL deposits rose by US$ 390 million. As such, deposit dollarization inched slightly downward to report 80.0% in February 2021, against 80.4% in December 2020.
Loans to the private sector contracted by US$ 677 million over the first two months of 2021 (against a much more significant decline of US$ 3,689 million over the first two months of 2020) to reach a total lending base of US$ 35.5 billion in February 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$ 429
US$EVOLUTIONUS$ billion billion OF LEBANON'S BANKING SECTOR DEPOSITS
1 01 0 174174 169169 1 01 0 162162 159159 1 01 0 152152 150150 139139 139139 1 01 0
1 01 0
120120 Dec-2015Dec-2015 Dec-2016Dec-2016 Dec-2017Dec-2017 Dec-2018Dec-2018 Dec-2019Dec-2019 Dec-2020Dec-2020 Feb-2021Feb-2021
EVOLUTION OF LEBANON'S BANKING SECTOR LOANS US$US$ billion billion