JUNE 05 - JUNE 11, 2017 WEEK 23 CONTACTS The LEBANON WEEKLY MONITOR Treasury & Capital Markets Economy ___________________________________________________________________________ Bechara Serhal p.2 CPI INCREASES BY A YEARLY 1.3% BY END-APRIL 2017 (961-1) 977421 The Consultation & Research Institute’s index of consumer prices has risen in April 2017, as the year- [email protected] on-year index increased by 1.3% compared to results of April 2016. The 12-month moving average yet Nadine Akkawi registered a mild increase of 0.1%. (961-1) 977401 [email protected] Also in this issue p.3 Total number of passengers at the airport up by 5.4% year-on-year in the first five months Private Banking of 2017 Toufic Aouad p.4 Gross public debt at US$ 76.9 billion at end-April 2017 (961-1) 954922 [email protected] Surveys ___________________________________________________________________________ Corporate Banking p.5 AMERICAN UNIVERSITY OF BEIRUT RANKS SECOND REGIONALLY BY QS WORLD UNIVERSITY RANKINGS Khalil Debs The American University of Beirut (AUB) was ranked 235th among 950 universities (2nd regionally), (961-1) 977229 according to QS World University Rankings for the school year 2016-2017. [email protected] Also in this issue p.5 Prices of available apartments for sale in Lebanon drops by 18% over past five years p.6 Slow recovery in 2017 to keep the outlook on consumer market muted, says BMI Research Corporate News ___________________________________________________________________________ RESEARCH p.7 BANKMED’S ASSETS EDGE UP TO US$ 16.8 BILLION AT END-MARCH 2017 Total assets of BankMed reached US$ 16.8 billion at end-March 2017, up by 4.2% from end-2016, as per Marwan Barakat (961-1) 977409 Bankdata Financial Services. [email protected] Also in this issue Jamil Naayem p.8 Shaker Holdings sells the remainder of its stake in BLOM Bank (961-1) 977406 p.8 Construction of Qaissamani Dam in Falougha completed [email protected] p.8 Spinneys to open three new branches by the end of 2017 p.8 Plastic and paper bag factory to open in Nabatieh in October Salma Saad Baba (961-1) 977346 Markets In Brief [email protected] ___________________________________________________________________________ p.9 STABILITY IN EQUITY AND BOND PRICES AMID CONTINUOUS ELECTORAL LAW Fadi Kanso DISCUSSIONS (961-1) 977470 Amid continuous electoral law discussions, Lebanon’s capital markets saw this week stability in equity [email protected] and bond prices along with balanced FX activity. In details, the BSE total trading value reached US$ 12.9 million as compared to an average weekly turnover of US$ 12.6 million since the beginning of Gerard Arabian 2017, while the price index reported a mild rise of 0.2%. At the level of the Eurobond market, medium- (961-1) 964047 term to long-term papers saw two-way flows, which was reflected by a stability in the weighted [email protected] average bid Z-spread at 403 bps. As to the cost of insuring debt, Lebanon’s five-year CDS spreads expanded from 365 bps last week to 385 bps this week amid domestic local political bickering. On the Farah Nahlawi (961-1) 959747 FX market, the commercial demand for the US dollar persisted, while the offer was shy. This kept the [email protected] LP/US$ interbank rate at LP 1,514-LP 1,514.50. Anthony Badr (961-1) 964714 LEBANON MARKETS: WEEK OF JUNE 05 - JUNE 11, 2017 [email protected] Nivine Turyaki (961-1) 959615 [email protected] Week 23 June 05 - June 11, 2017 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] JUNE 05 - JUNE 11, 2017 WEEK 23 ECONOMY ______________________________________________________________________________ CPI INCREASES BY A YEARLY 1.3% BY END-APRIL 2017 The Consultation & Research Institute’s index of consumer prices has risen in April 2017, as the year- on-year index increased by 1.3% compared to results of April 2016. The 12-month moving average yet registered a mild increase of 0.1%. Five of the nine indices registered increases this April. The most significant increase was registered by the “Recreation” category (5.3%), followed by the “Healthcare” category (4.8%) and the “Food and Beverages” category (4.2%). On the other hand, three indices witnessed decreases, with the most significant decrease registered by the “Apparel” category (-9.4%), followed by the “Durable Consumer Goods” category (-4.7%). The April 2017 year-on-year “Food and Beverages” index increased by 4.2% since April 2016. Three of its four main indices registered increases, namely those of the “Tobacco Products” category (8.2%), the “Food” category (4.1%) and the “Nonalcoholic Beverages” category (2.1%). On the other hand, the “Alcoholic Beverages” category witnessed a decrease by 2.2% this April, compared to the results of the same month in 2016. The index for “Food” increased by 4.1% compared to its level last year, as seven of the food group indices have registered increase. The highest increases being in the “Vegetables” category (24.5%), followed by the “Fruits” category (10.9%) and the “Sugar and Confectioneries” category (7.3%). Three categories registered decreases, namely those of the “Other Food Products” category (-5.7%), the “Cereal and Bakery Products” category (-2.4%) and the “Grains and Nuts” category (-0.6%). Apparel year-on-year prices registered a 9.4% decrease in April 2017. This was the result of the decreases in both of its two main categories. The “Footwear” index witnessed a sharp drop by 21.7%, while the “Clothing and Sewing Materials” index decreased by 3.9% this month. The “Durable Consumer Goods” index decreased by 4.7% since April 2016. Five categories witnessed decreases, the most significant being in the “Linens” category (-12.5%), followed by the “Cleaning INFLATION RATE (12-MONTH MOVING AVERAGE) Source: Consultation & Research Institute Week 23 June 05 - June 11, 2017 2 JUNE 05 - JUNE 11, 2017 WEEK 23 Products and Services” category (-9.3%). Another two categories recorded slight increases in April 2017, namely those of the “Household Furnishings” category (0.3%) and the “Kitchenware” category (0.1%). The healthcare index increased by 4.8% since April 2016. Two indices registered increases, namely those of the “Outpatient Services” (13.0%) and the “Inpatient Services” (2.1%) categories. The sole decrease was registered in the index for “Medications and Medical Accessories” category (-11.0%). The CPI component for “Transportation and Telecommunications” increased by 0.7% (year-on-year) in April 2017, due to an equivalent increase in the “Transportation” index (0.8%), while the “Telephone Services” index remained stable. The index for education decreased by 0.9% from the previous year, due to the decreases in all of its three categories, namely those of “School Transportation” category (-4.6%), “Educational Books and Supplies” category (-1.7%) and “Tuition Fees” category (-0.2%) this April. The index for recreation increased by 5.3% compared to its results in April 2016, due to the surge in both of its two main indices: the “Reading Materials and Photography” category (7.1%) and the “Movies and Restaurants” category (5.0%). The index of “Other Goods and Services” remained stable since April 2016. This was basically due to the slight increase registered in the “Jewelry” category (0.7%), which neutralized the equivalent decrease in the “Personal Care” category (-0.5%). _____________________________________________________________________________ TOTAL NUMBER OF PASSENGERS AT THE AIRPORT UP BY 5.4% YEAR-ON-YEAR IN THE FIRST FIVE MONTHS OF 2017 Figures released by the Hariri International Airport revealed that the total number of passengers recorded a yearly 5.4% increase in the first five months of 2017. The total freight handled by the airport edged up by 3.2% year-on-year in the aforementioned period. In contrast, the number of aircraft posted a decrease of 3.1% year-on-year in the aforementioned period. A detailed look at the activity shows that the number of incoming passengers increased by a yearly 5.1% and that of departing passengers rose by 5.8% to reach 1,397,914 and 1,442,405 respectively in the first PASSENGERS AT THE AIRPORT * Sources: Rafic Hariri International Airport, Bank Audi's Group Research Department Week 23 June 05 - June 11, 2017 3 JUNE 05 - JUNE 11, 2017 WEEK 23 five months of 2017. The number of transiting passengers fell by 69.1% year-on-year to attain 1,904 in the first five months of 2017. When including the latter mentioned category, the total number of passengers using the airport attained 2,842,223, up by a yearly 5.3%. Excluding transiting passengers, the total would be 2,840,319, i.e. 5.4% higher than the level seen in the first five months of 2016. Looking at the aircraft activity, landings and take-offs recorded a 3.1% decrease each with the former and the latter amounting to 13,097 and 13,096 planes each in the first five months of 2017. ____________________________________________________________________________ GROSS PUBLIC DEBT AT US$ 76.9 BILLION AT END-APRIL 2017 The data published by the Ministry of Finance in Lebanon showed that the country’s gross debt reached US$ 76.9 billion at end-April 2017, up by 2.7% from the level seen at end-2016, and up by 7.4% from the level registered at end-April 2016. Domestic debt was higher by 0.6% from end-2016 and by 6.9% from end-April 2016 to reach a total of US$ 47.0 billion at end-April 2017.