Weekly Market Watch Economic Research Unit€¦ · LEBANON NEWS Weekly Market Watch SOURCE: GDLRC,...
Transcript of Weekly Market Watch Economic Research Unit€¦ · LEBANON NEWS Weekly Market Watch SOURCE: GDLRC,...
EconomicResearchUnitCreditLibanaisHeadquarters
AdliehBeirut,[email protected]
CREDIT LIBANAIS S.A.L.
WeeklyMarketWatch
IssueNo.523
October22nd–October28th2016
LLEEBBAANNOONN NEWS
ECONOMIC INSIGHTS
> Value of Real Estate Sale Transactions up by 6.00% Y-O-Y by September 2016 1
> Lebanon Ranks 126th in the World in the 2017 Ease of Doing Business 2
> Lebanon Ranks 135th in the World in the 2016 Global Gender Gap Index 3
> Lebanon Ranks 53rd in the World in EIU’s 2016 Global Microscope Index 4
> Lebanon Ranks 80th in the Charities Aid Foundation’s World Giving Index 5
> Industrial Exports Drop by 14.67% Y-O-Y to $1,712.6 Million by August 2016 6
> Banks’ Share of LBP-Denominated Debt at 38.6% in August 2016 7
> The Number of BIA Passengers Adds 6.39% Y-O-Y by September 2016 8
CORPORATE NEWS
> Bank Audi Reports Net Profits in Excess of $350 Million by September 2016 9
> Byblos Bank Reports Net Profits of Around $114 Million by September 2016 10
> Bank of Beirut’s Net Profits Near $150 Million by September 2016 11
> Bank BEMO’s Net Profits at $10.39 Million by Q3-2016 12 > Holcim (Liban) to Decrease its Capital 13 > BSE Announces Delisting of Maturing Eurobonds 13 MONETARY PERFORMANCE
> Monetary Aggregates 14 > Money Markets 14 LEBANESE EQUITIES
> Lebanese Equities & Credit Libanais Indices 15
Lebanon's Economic & Financial Sector Indicators 17 Lebanon's Ratings 18
VALUE OF REAL ESTATE SALE TRANSACTIONS UP BY 6.00% Y-O-Y BY SEPTEMBER 2016
The value of real estate transactions in Lebanon increased by 6.00% annually to $6.12 billion as at the end of the first nine months of 2016, compared to $5.77 billion during that same period last year. LEBANON RANKS 126TH IN THE WORLD IN THE 2017 EASE OF DOING BUSINESS
The World Bank Group positioned Lebanon 126th out of 190 countries around the globe in its 2017 Doing Business report, slipping as such from the 123rd place it occupied in the 2016 Doing Business report. LEBANON RANKS 135TH IN THE WORLD IN THE 2016 GLOBAL GENDER GAP INDEX
Lebanon improved three positions worldwide in the World Economic Forum’s global gender gap index from the 138th place (score: 0.598) in the year 2015 to the 135th (score: 0.598) place in 2016. LEBANON RANKS 53RD IN THE WORLD IN EIU’S 2016 GLOBAL MICROSCOPE INDEX
According to the EIU, Lebanon was assigned a Microscope Index score of 29 for the year 2016 (unchanged from the year 2015), occupying as such the 53rd position in the world and the 4th place in the region. BANKS’ SHARE OF LBP-DENOMINATED DEBT AT 38.6% IN AUGUST 2016
The shares of each of Lebanese banks, Banque du Liban, and the non-banking sector of LBP-denominated public debt remained almost unchanged at respective values of 38.6%, 44.9%, and 16.5% in August.
TABLE OF CONTENTS
Weekly Market Watch
ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231
"BDL" Banque Du Liban "ABL" Association of Banks in Lebanon "MOF" The Lebanese Ministry of
Finance "BOP" Balance of Payment "IMF" The International Monetary Fund "Moody's" Moody's Investors Service "BSE" Beirut Stock Exchange "GDRs" Global Depositary Receipts "M1" Currency in Circulation + Demand
Deposits in LBP "M2" M1 + Other Deposits in LBP "M3" M2 + Deposits in Foreign Currencies "M4" M3+ Treasury Bills Held By Non Banking System, Including Accrued
Interests "CPI" Consumer Price Index "PPI" Producer Price Index "CLASI" Credit Libanais Aggregate Stock Index "CLFI" Credit Libanais Financial Sector Stock Index
"CLCI" Credit Libanais Construction Sector Stock Index “EIU” Economist Intelligence Unit “EOY” End of Year "P/E" Price to Earnings Multiple "P/BV" Price to Book Multiple "YTD" Year To Date "YTD Price Performance" Yield to Date Price Appreciation
"Forex" Foreign Exchange "LBP" The Lebanese Pound "USD" The United States Dollar "Yen" The Japanese Yen "GBP" The British Pound/ Sterling Pound "CHF" The Swiss Franc "Y-O-Y" Year-On-Year "GDP" Gross Domestic Product "MENA" Middle East and North Africa
“LE” Livre Egyptienne – Egyptian Pound
“SAR” Saudi Arabian Riyal “AED” United Arab Emirates Dirham “BD” Bahraini Dinar
SYNOPSIS OF TERMS
Weekly Market Watch
ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231
LEBANON NEWS
Weekly Market Watch
SOURCE: GDLRC, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 1
VALUE OF REAL ESTATE SALE TRANSACTIONS UP BY 6.00% Y-O-Y BY SEPTEMBER 2016
The Lebanese real estate sector witnessed a slowdown in the volume of new transactions during the month of September 2016 after having reported an improvement a month earlier. In details, the number of real estate transactions plunged by 10.08% month-on-month to 5,261, while the value of real estate transaction inched 2.00% higher to $729.06 million. On the other hand, the average value per transaction rallied by 13.44% month-on-month to $138,579, up from $122,164 in August. This monthly slowdown in the activity of the real estate sector owes, in part, to the 11.14% drop in the volume of transactions in the Beirut region coupled with some 7.27% fall in the volume of transactions in the Baabda region and the 7.11% decrease in the volume of transactions in the Kesserwan region. On a cumulative basis, however, the number of real estate transactions rose by 1.23% y-o-y to 45,848 as at the end of the first nine months of 2016, from 45,293 transactions during that same period last year. Similarly, the value of realty transactions increased by 6.00% annually to $6.12 billion, compared to $5.77 billion by end of September 2015. Consequently, the average value per transaction appreciated by 4.71% y-o-y to $133,446 YTD September, from $127,439 in the same period last year. It is worth noting that the share of sales to foreigners stood at 1.64% by September, lagging significantly behind December’s reading of 2.20%. The average value per real estate transaction in Beirut rose by 5.63% this year to $538,546 by September, up from $509,841 in December 2015. Similarly, the average value per transaction in the Metn region inched 3.81% higher YTD September to $213,350, from $205,516 at end of 2015. On the other hand, the average value per transaction in the Kesserwan region shed 11.09% to $124,628, down from $140,169 in 2015.
Source: GDLRC, Credit Libanais Economic Research Unit
6.79
9.48
8.84
9.188.71
8.958.01 6.1283,622
94,32082,984
74,56969,198 70,721 63,386
45,848
0.001.002.003.004.005.006.007.008.009.0010.00
010,00020,00030,00040,00050,00060,00070,00080,00090,000
100,000
2009 2010 2011 2012 2013 2014 2015 YTDSeptember
2016
$ Billion
Evolution of Value & Volume of Real Estate Transactions
Value of Transactions ($ Billion) Number of Transactions
2.53%
2.04%1.84% 1.86% 1.85% 1.69%
2.20%
1.64%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
Sales to Foreigners as a Percentage of Total Sales
Source:GDLRC, Credit Libanais Economic Research Unit
$295,033
$314,941
$369,696
$456,136
$524,277
$499,948
$567,233
$509,841
$538,546
$103,037
$118,546
$153,064
$170,953
$182,797
$213,584
$210,955
$205,516
$213,350
$78,536
$84,290
$94,325
$97,487
$117,596
$124,664
$139,612
$140,169
$124,628
$71,345
$78,245
$103,397
$100,712
$108,028
$120,983
$138,644
$134,728
$150,474
$0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000
2008
2009
2010
2011
2012
2013
2014
2015
YTD September 2016
Historical Evolution of Average Value per Transaction Accross Different Lebanese Regions
Baabda Kesserwan Metn Beirut
Source: General Directorate of Land Registry and Cadastre, Credit Libanais Economic Research Unit
Real Estate TransactionsFor the
Month of August 2016
For the Month of
September 2016
Monthly % Change
YTD September
2015
YTD September
2016
Y-O-Y % Change
Number of Sale Transactions 5,851 5,261 -10.08% 45,293 45,848 1.23%
Value of Transactions (USD Billion) 0.71 0.73 2.00% 5.77 6.12 6.00%
Average Value per Transaction (USD) 122,164 138,579 13.44% 127,439 133,446 4.71%Source: General Directo rate of Land Registry and Cadastre, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: WORLD BANK GROUP, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 2
LEBANON RANKS 126TH IN THE WORLD IN THE 2017 EASE OF DOING BUSINESS
The World Bank Group released this week its 2017 Doing Business report, a publication which assesses the judicial and regulatory framework governing 10 aspects of the life of a business, namely “starting a business”, “dealing with construction permits”, “getting electricity”, “registering property”, “getting credit”, “protecting minority investors”, “paying taxes”, “trading across borders”, “enforcing contracts”, and “resolving insolvency”. The report positioned Lebanon 126th out of 190 countries around the globe for the year 2017, slipping as such from the 123rd place it occupied in the 2016 Doing Business report. Lebanon came right behind St. Vincent and the Grenadines (global rank: 125), yet outperformed Nicaragua (global rank: 127) by one position. Lebanon occupied the 139th position in the world in terms of “starting a business”, noting that 8 procedures and 15 days are required to start a business. As for “getting credit”, which revolves around assessing “credit information systems and the legal rights of borrowers and lenders in collateral and bankruptcy laws”, the report positioned Lebanon 118th internationally, with a score of 6 in the depth of credit information index and a score of 2 in the strength of legal rights index. Lebanon managed to report some improvement in only two areas, namely “trading across borders” and “enforcing contracts”. It maintained, however, the same rank with regards to “registering property”, yet lost some rank when it comes to “starting a business”, “dealing with construction permits”, “getting electricity”, “getting credit”, “protecting minority investors”, “paying taxes”, and “resolving insolvency”. On a wider scale, New Zealand enjoyed the leading position in the world in terms of doing business, leapfrogging Singapore, which had led the list of countries for ten consecutive years, and which was followed by Denmark. On a regional basis, the United Arab Emirates outperformed other MENA countries in the World Bank’s Doing Business report for the year 2017 (global rank: 26), followed by Bahrain (global rank: 63), Oman (global rank: 66), and Morocco (global rank: 68), only to name a few. Lebanon ranked 12th among MENA countries in the 2017 Doing Business report, outperforming each of West Bank and Gaza (global rank: 140), Algeria (global rank: 156), Iraq (global rank: 165), Syria (global rank: 173), Yemen (global rank: 179), and Libya (global rank: 188).
Starting a business (Rank) 139 Trading across borders (Rank) 134 Registering Property (Rank) 103Procedures (number) 8 Time to export (hours) 144 Procedures (number) 8Time (days) 15 Cost to export (USD ) 510 Time (days) 34Cost (% of income per capita) 40.6 Time to import (hours) 252 Cost (% of property value) 5.9Minimum capital (% of income per capita) 40.7 Cost to import (USD ) 830 Quality of land administration index (0-30) 16
Getting credit (Rank) 118Strength of legal rights index (0-12) 2 Enforcing contracts (Rank) 127 Paying Taxes (Rank) 67Depth of credit information index (0-8) 6 Time (days) 721 Payments (number per year) 20Credit registry coverage (% of adults) 22 Cost (% of claim) 30.8 Time (hours per year) 181Credit bureau coverage (% of adults) 0 Quality of judicial process index (0-18) 7 Total tax rate (% of profit) 30.3
Getting Electricity (Rank) 122Procedures (number) 5 Protecting minority investors (rank) 145 Resolving Insolvency (Rank) 143Time (days) 75 Extent of disclosure index (0-10) 9 Time (years) 3Cost (% of income per capita) 114.8 Extent of director liability index (0-10) 1 Cost (% of estate) 15Reliability of supply & transparency of tariffs index (0-8) 0 Ease of shareholder suits index (0-10) 5 Recovery rate (cents on the dollar) 32.6
Extent of shareholder rights index (0-10) 3 Strength of insolvency framework index (0-16) 4Dealing with construction permits (Rank) 135 Extent of ownership and control index (0-10) 1Procedures (number) 18 Extent of corporate transparency index (0-10) 5Time (days) 244Cost (% of warehouse value) 4.9Building quality control index (0-15) 13Source: World Bank Group, Credit Libanais Economic Research Unit
Country 2016 Rank 2017 Rank
New Zealand 2 1
Singapore 1 2
Denmark 3 3
United Arab Emirates 31 26
Bahrain 65 63
Oman 70 66
Morocco 75 68
Tunisia 74 77
Qatar 68 83
Saudi Arabia 82 94
Kuwait 101 102
Jordan 113 118
Iran 118 120
Egypt 131 122
Lebanon 123 126
West Bank and Gaza 129 140
Algeria 163 156
Iraq 161 165
Syria 175 173
Yemen 170 179
Libya 188 188Source: World Bank, Credit Libanais Economic Research Unit
Doing Business 2017
0 20 40 60 80 100 120 140 160 180 200
United Arab EmiratesBahrain
OmanMoroccoTunisia
QatarSaudi Arabia
KuwaitJordan
IranEgypt
LebanonWest Bank and Gaza
AlgeriaIraq
SyriaYemen
Libya
26636668
7783
94102
118120
122126
140156
165173
179
188
Global Rankings of MENA Countries in the "2017 Doing Business" Report
Source: World Bank, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: WORLD ECONOMIC FORUM, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 3
LEBANON RANKS 135TH IN THE WORLD IN THE 2016 GLOBAL GENDER GAP INDEX
The World Economic Forum released its “Global Gender Gap Report 2016” in which it sheds light on the positive correlation between gender gap reduction and a country’s national level of competitiveness. More particularly, the report assesses 144 countries’ gender disparities on the economic, political, educational attainment, and health fronts, and this in an attempt to spot the areas in need for a gender gap reduction. The report unveiled that the countries included by the index have covered 96% of the gap in health between men and women, and more than 95% of the gap in terms of educational attainment. The improvement, however, was far less pronounced in terms of political empowerment and economic participation and opportunity where only 23% and 59% of the respective gaps were closed. The report further highlighted that out of 142 countries covered in this year’s and last year’s index, 68 countries have reported an improvement in their overall gender gap score compared to last year, whilst 74 have seen it deteriorate. The report also unveiled that no country around the world has managed to fully close its gender gap so far, yet Rwanda, for the first time, and four out of five Nordic countries (Sweden, Iceland, Finland, and Norway) have succeeded at closing more than 80% of the gap in the index. Last-placed Yemen, on the other hand, has closed barely 52% of the gap between men and women. On a regional scale, the Middle East & North Africa (MENA) region bottomed the list with regards to its global gender gap index score for yet another consecutive year, noting that said region was able to tame gender disparities by around 61%, versus nearly 78% in North America, which topped the list and 75% for Western Europe which ranked second. More specifically, the report highlighted that the MENA region ranked last in the world in the political empowerment sub-index with only 9% of the gap closed and second to last when it comes to educational attainment, while performing exceptionally well on the health & survival fronts. Overall in the region, 10 countries improved on last year’s score, while eight countries have reported a drop in their score. The report positioned Qatar 119th worldwide and 1st regionally in the 2016 global gender gap index (score: 0.643), followed by Algeria (global rank: 120; score: 0.642), the United Arab Emirates (global rank: 124; score: 0.639), Tunisia (global rank: 126; score: 0.636), and Kuwait (global rank: 128; score: 0.624). Locally, Lebanon improved three positions worldwide in the global gender gap index from the 138th place (score: 0.598) in the year 2015 to the 135th (score: 0.598) place in 2016. In details, the report positioned Lebanon 123rd globally (score: 0.440) in the economic participation & opportunity sub-index, 108th (score: 0.959) in the educational attainment sub-index, 102nd (score: 0.970) in the health & survival pillar, and 143rd (score: 0.021) in the political empowerment metric. It is worth noting that Lebanon slipped one position rank (12th) on an annual basis in the 2016 global gender gap index, outperforming Morocco (global rank: 137; score: 0.597), Iran (global rank 139, score 0.587), Saudi Arabia (global rank: 141; score: 0.583), Syria (global rank: 142; score: 0.567), and Yemen (global rank: 144; score: 0.516). Countries in the MENA Region
Score 2015
Score 2016
Rank 2016
Score 2016
Rank 2016
Score 2016
Rank 2016
Score 2016
Rank 2016
Score 2016
Rank 2016
Qatar 0.645 0.643 119 0.619 97 0.982 92 0.957 136 0.013 144Algeria 0.632 0.642 120 0.435 134 0.962 104 0.966 127 0.205 56United Arab Emirates 0.646 0.639 124 0.456 130 1.000 32 0.961 132 0.139 83Tunisia 0.634 0.636 126 0.444 131 0.960 106 0.969 110 0.170 71Kuwait 0.646 0.624 128 0.520 125 0.997 47 0.957 136 0.022 140Mauritania 0.613 0.624 129 0.469 128 0.858 131 0.973 85 0.195 59Turkey 0.624 0.623 130 0.464 129 0.958 109 0.980 1 0.090 113Bahrain 0.644 0.615 131 0.475 127 0.987 84 0.961 132 0.037 137Egypt 0.599 0.614 132 0.444 132 0.952 112 0.971 95 0.087 115Oman 0.604 0.612 133 0.483 126 0.973 97 0.971 99 0.021 142Jordan 0.593 0.603 134 0.381 138 0.993 64 0.966 131 0.073 123Lebanon 0.598 0.598 135 0.440 123 0.959 108 0.970 102 0.021 143Morocco 0.593 0.597 137 0.380 139 0.925 122 0.971 93 0.110 98Iran 0.580 0.587 139 0.357 140 0.975 94 0.971 98 0.046 136Saudi Arabia 0.605 0.583 141 0.328 142 0.961 105 0.966 128 0.077 121Syria 0.568 0.567 142 0.273 144 0.963 103 0.970 101 0.063 130Yemen 0.484 0.516 144 0.352 141 0.720 141 0.967 122 0.026 139Source: World Economic Forum, Credit Libanais Economic Research Unit
Political EmpowermentOverall
Economic Participation &
Opportunity
Educational Attainment
Health & Survival
LEBANON NEWS
Weekly Market Watch
SOURCE: EIU, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 4
LEBANON RANKS 53RD IN THE WORLD IN EIU’S 2016 GLOBAL MICROSCOPE INDEX
The Economist Intelligence Unit (EIU) released this week its “Global Microscope 2016” report in which it ranks 55 countries across the globe based on their respective microfinance business environment. For that purpose, the EIU calculates a Microscope Index, which takes into account each country’s “government support for financial inclusion”, “regulatory and supervisory capacity for financial inclusion”, “prudential regulation”, “regulation and supervision of credit portfolios”, “regulation and supervision of deposit-taking activities”, “regulation of insurance targeting low-income populations”, “regulation and supervision of branches and agents”, “requirements for non-regulated lenders”, “electronic payments”, “credit-reporting systems”, “market-conduct rules”, and “grievance redress and operation of dispute-resolution mechanisms”, in addition to an adjustment factor labelled “stability”. It is worth noting that each of said indicators takes into account two to three related sub-indicators. According to the report, Peru retained its leading position in the year 2016 in terms of the sophistication and development of its microfinance environment along with Colombia, with an overall index score of 89 each, followed by India and the Philippines (score: 78 each). On a regional basis, the report positioned the Middle East and North Africa (MENA) region last in the 2016 Microscope Index, with MENA countries reporting divergent scores across all 12 indicators. For instance, Morocco ranked 15th in the world in the Microscope Index, and many of the country’s sub-indicators scores were in line with those of the world leaders. Conversely, Jordan came in 46th, Egypt 51st, and Lebanon 53rd among the 55 covered countries in the 2016 Microscope Index. On the local front, Lebanon was assigned an index score of 29 for the year 2016 (unchanged from the year 2015), occupying as such the 53rd position in the world and the 4th place in the region, preceded by Egypt (index score: 31), Jordan (index score: 38), and Morocco (index score: 55). The report indicated that financial inclusion in Lebanon is hindered by the prevailing local political tensions and the ongoing hostilities in Syria. On the other hand, the EIU pinpointed that the Lebanese Central Bank has issued more stringent circulars and regulations confining the activities of non-bank lenders (“comptoirs”). In parallel, the report highlighted that the first official microfinance association was registered in Lebanon in March 2015 and is currently fully operational, yet projected the impact of said association on Lebanon’s microfinance activity to be rather limited.
Lebanon
Egypt
Jordan
Morocco
29
31
38
55
2016 Microscope Index Scores in the MENA Region
Source: Economist Intelligence Unit, Credit Libanais Economic Research Unit
Country 2016 Index Score 2016 Rank 2015 Index
Score 2015 Rank
Peru 89 1 90 1
Colombia 89 1 86 2
Philippines 78 3 81 3
India 78 3 71 4
Pakistan 63 5 64 5
Chile 62 6 62 6
Tanzania 62 6 62 6
Kenya 61 8 66 11
Rwanda 61 8 68 16
Mexico 60 10 60 8
Morocco 55 15 55 14
Jordan 38 46 32 48
Egypt 31 51 29 51
Lebanon 29 53 29 51
Middle East & North Africa Region
Source: Economist Intelligence Unit, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: CHARITIES AID FOUNDATION, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 5
LEBANON RANKS 80TH IN THE CHARITIES AID FOUNDATION’S WORLD GIVING INDEX
The Charities Aid Foundation (CAF) published its annual report titled "World Giving Index 2016" aiming at providing insight into the world's scope and nature of giving and accordingly ranking countries based on the generosity of their peoples. The foundation bases its estimation of the degree of giving on a criterion that takes into consideration three main aspects of giving activities. The first has to do with whether one responds positively to helping a stranger; the second tackles the aspect of donating money to the needy; while the third relates to whether one engages in volunteering activities and how much time is given to them. The methodology is characterized by simplicity: answers and responses to the above three questions are recorded and averaged in the 140 countries included in the survey. With respect to the year 2015, Myanmar came on top of the list of countries in the CAF World Giving Index. The country had a giving index score of 70% with average money donations scoring a significantly high 91%. Second in the rank came the United States of America with an overall giving index score of 61%. Australia came next with a 60% score. With respect to the Arab world, two countries made it to the top 20 of the list, namely, the United Arab Emirates which ranked 10th (CAF World Giving Index = 53%) and Kuwait which ranked 19th (CAF World Giving Index = 48%). Locally, Lebanon came 80th in the global ranking of the year 2015 improving its ranking by 16 positions from the previous year (96th in 2014) and it came 8th among the Arab countries right after Jordan (71st) and before Mauritania (88th). In more detail, Lebanon scored 31% in the CAF World Giving Index (27% in 2014) with each of the average help for a stranger, average money donation, and average volunteering time scoring 42%, 39%, and 10% (43%, 31%, 8% in 2014) respectively.
CountryCAF World
Giving Index ranking
CAF World Giving Index
score (%)
Helping a stranger
average (%)
Donating money
average (%)
Volunteering time
average (%)
Myanmar 1 70 63 91 55
United States of America 2 61 73 63 46
Australia 3 60 68 73 40
United Arab Emirates 10 53 75 63 21
Kuwait 19 48 78 48 17
Iraq 31 43 81 30 17
Saudi Arabia 41 41 73 35 15
Somalia 58 37 77 14 21
Syria 66 36 62 26 20
Jordan 71 33 65 24 11
Lebanon 80 31 42 39 10
Mauritania 88 29 37 29 22
Egypt 112 24 47 20 4
Tunisia 122 23 51 6 11
Morocco 123 22 54 4 9
Yemen 138 17 41 5 6
Palestinian Territories 139 17 34 8 9
Source: Charities Aid Foundation, Credit Libanais Economic Research Unit
27
43
31
8
31
4239
10
0
5
10
15
20
25
30
35
40
45
50
CAF World GivingIndex score
Helping a strangeraverage
Donating moneyaverage
Volunteering timeaverage
Percentage (%)
Comparison between Lebanon's 2014 and 2015 scores
2014 2015
Source: Charities Aid Foundation, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: THE LEBANESE MINISTRY OF INDUSTRY, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 6
INDUSTRIAL EXPORTS DROP BY 14.67% Y-O-Y TO $1,712.6 MILLION BY AUGUST 2016
According to the Lebanese Ministry of Industry, Lebanon’s industrial exports widened by 30.26% month-on-month to $232.9 million in August 2016, compared to $178.8 million in July. On the other hand, industrial exports fell by 14.67% annually to $1.71 billion during the first eight months of the current year, compared to $2.01 billion over that same period in 2015. More specifically, exports of chemical products dropped by 20.99% ($79 million) on a yearly basis to $297.3 million, accompanied by a 22.52% ($48 million) contraction in exports of base metals & articles of base metal to $165.1 million, only to name a few. Concurrently, industrial imports shed 4.90% y-o-y to $166.9 million by August 2016, compared to $175.5 million a year earlier. Exports of “machinery and mechanical appliances” topped the list of Lebanon’s industrial exports, accounting for 24.26% ($415.4 million) of the total exports bill, followed by “prepared foodstuffs” ($307 million <17.93%>) and “chemical products” ($297.3 million <17.36%>). On the imports front, Italy led the list of countries exporting to Lebanon ($37.3 million <22.32%>), followed by China ($34.9 million <20.89%>) and Germany ($21.6 million <12.96%>), as elaborated in the section below:
0
500
1,000
1,500
2,000
2,500
August 2014 August 2015 August 2016
2,119.02,007.0
1,712.6
$ Million
Cumulative Evolution of Industrial Exports
Source: Ministry of Industry, Credit Libanais Economic Research Unit
150
155
160
165
170
175
180
185
190
195
August 2014 August 2015 August 2016
193.2
175.5
166.9
$ Million
Cumulative Evolution of Industrial Imports of Equipment & Machinery
Source: Ministry of Industry, Credit Libanais Economic Research Unit
Product Value ($ Million)Machinery and Mechanical Appliances 415.4Prepared Foodstuffs 307.0Chemical Products 297.3Base Metals and Articles of Base Metal 165.1Plastics and Articles Thereof 92.3Others 435.5Total Industrial Exports 1,712.6Source: Lebanese M inistry of Industry, Credit Libanais Economic Research Unit
Breakdown of Industrial Exports by Product During the Period Ending August 2016
Country Value ($ Million)Italy 37.3China 34.9Germany 21.6Turkey 11.0United States of America 10.4Others 51.8Total Industrial Imports 166.9
Breakdown of Imports of Equipment & Machinery by Country of Origin During the Period Ending August 2016
Source: Lebanese M inistry of Industry, Credit Libanais Economic Research Unit
Machinery and Mechanical Appliances24.26%
Prepared Foodstuffs17.93%Chemical Products
17.36%
Base Metals and Articles of Base
Metal9.64%
Plastics and Articles Thereof
5.39%
Others25.43%
Breakdown of Industrial Exports by Product DUring the Period Ending August 2016
Italy22.32%
China20.89%
Germany12.96%
Turkey6.57%
United States of America6.21%
Others31.06%
Breakdown of Imports of Equipment & Machinery by Country of Origin During the Period Ending August 2016
Y-O-Y(USD Million) August-2015 August-2016 % ChangeIndustrial Exports 2,007.0 1,712.6 -14.67%
Industrial Imports of Equipment & Machinery 175.5 166.9 -4.90%
Evolution of Industrial Activity for the Eight-Month Period Ending
Source: Lebanese Ministry of Industry, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: ABL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 7
BANKS’ SHARE OF LBP-DENOMINATED DEBT AT 38.6% IN AUGUST 2016
According to statistics published by the Association of Banks in Lebanon (ABL), gross public debt rose by 0.90% ($0.66 billion) during the month of August 2016 to LBP 111,621 billion ($74.04 billion), up from LBP 110,628 billion ($73.39 billion) in July. The shares of each of Lebanese banks, Banque du Liban, and the non-banking sector of LBP-denominated debt remained almost unchanged at respective values of 38.6%, 44.9%, and 16.5% in August. As far as foreign currency-denominated debt is concerned, sovereign debt in the form of Republic of Lebanon Eurobonds constituted 92.6% of total foreign currency debt, followed by lines of credit obtained through multilateral agreements (3.6%), bilateral facilities (3.4%), and funds secured in the aftermath of the Paris II summit (0.1%). The average maturity of debt denominated in domestic currency slightly declined from 3.52 years in July to 3.50 years by the end of August, carrying a weighted annual interest rate of 6.95%, down from 6.96% in July. On the other hand, outstanding debt denominated in foreign currencies carried an average maturity of 6.36 years as at end of August 2016, down from 6.44 years by July, with the weighted average annual interest rate remaining stagnant at 6.41%.
(Billion USD) Aug-2015 Jul-2016 Aug-2016 Monthly % Change
Y-O-Y % Change
Debt in LBP by Holder 42.73 44.37 44.96 1.31% 5.21%
- Banks 20.38 17.13 17.35 1.31% -14.86%
- Banque Du Liban 15.17 19.92 20.19 1.31% 33.07%
- Non-Banking Sector 7.18 7.32 7.42 1.31% 3.33%
Average Maturity (in years) 3.32 3.52 3.50 -0.57% 5.42%
Weighted Average Interest Rate 6.93% 6.96% 6.95%
Debt in FC by Type 26.17 29.01 29.09 0.27% 11.17%
- Eurobonds 23.94 26.86 26.94 0.27% 12.50%
- Multilateral 0.97 1.04 1.05 0.27% 8.16%
- Bilateral 1.13 0.99 0.99 0.27% -12.10%
- Paris II Loans 0.05 0.06 0.03 -49.87% -44.42%
- Others 0.08 0.06 0.09 50.40% 11.17%
Average Maturity (in years) 5.74 6.44 6.36 -1.24% 10.80%
Weighted Average Interest Rate 6.44% 6.41% 6.41%
Gross Public Debt 68.89 73.39 74.04 0.90% 7.47%
Source: The Association o f Banks in Lebanon, Credit Libanais Economic Research Unit
Banks38.6%
BDL44.9%
Non-Banking Sector16.5%
Breakdown of Debt in LBP by Holder - as at End of August 2016
Source: ABL, Credit Libanais Economic Research UnitEurobonds, 92.6%
Multilateral, 3.6%
Bilateral, 3.4%Paris II Loans, 0.1%
Others, 0.3%
Breakdown of Debt in FC by Type - as at End of August 2016
Source: ABL, Credit Libanais Economic Research Unit
6.92%6.92%6.93%6.93%6.94%6.94%6.95%6.95%6.96%6.96%6.97%
3.2
3.25
3.3
3.35
3.4
3.45
3.5
3.55
Aug-2015
Sep-2015
Oct-2015
Nov-2015
Dec-2015
Jan-2016
Feb-2016
Mar-2016
Apr-2016
May-2016
Jun-2016
Jul-2016
Aug-2016
Years
Evolution of Average Maturity and Weighted Interest Rate of Debt Denominated in LBP
Average Maturity Weighted Interest Rate
Source: ABL, Credit Libanais Economic Research Unit
6.36%
6.38%
6.40%
6.42%
6.44%
6.46%
6.48%
5
5.2
5.4
5.6
5.8
6
6.2
6.4
6.6
6.8
Aug-2015
Sep-2015
Oct-2015
Nov-2015
Dec-2015
Jan-2016
Feb-2016
Mar-2016
Apr-2016
May-2016
Jun-2016
Jul-2016
Aug-2016
Years
Evolution of Average Maturity and Weighted Interest Rate of Debt Denominated in Foreign Currency
Average Maturity Weighted Interest Rate
Source: ABL, Credit Libanais Economic Research Unit
LEBANON NEWS
Weekly Market Watch
SOURCE: BIA, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 8
THE NUMBER OF BIA PASSENGERS ADDS 6.39% Y-O-Y BY SEPTEMBER 2016
The number of passengers travelling via the Beirut International Airport (BIA) rose by 6.39% on an annual basis to 5,902,116 during the first nine months of 2016, up from 5,547,423 passengers during that same period last year. More specifically, the number of arriving travelers expanded by 8.31% y-o-y to 2,934,756, accompanied by some 5.04% increase in the number of departing travelers to 2,960,064. The number of transit travelers, on the other hand, plunged by 62.81% on a yearly basis to 7,296, whereas the number of flights inched 5.11% higher to 54,270. This is further sketched in the charts below:
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
2007
2008
2009
2010
2011
2012
2013
2014
Sep-2015
2015
Sep-2016
3,326,433 3,869,607
4,985,499 5,552,746
5,653,969
5,960,414
6,264,368 6,569,469
5,547,423
7,240,388
5,902,116
BIA Total Passengers (Cumulative)
Source: BIA, Credit Libanais Economic Research Unit
Beirut InternationalAirport Sep-2015 Sep-2016 % ChangeTotal Passengers 5,547,423 5,902,116 6.39% o/w Arriving Passengers 2,709,692 2,934,756 8.31% o/w Departing Travelers 2,818,115 2,960,064 5.04% o/w Transit Travelers 19,616 7,296 -62.81%Number of Flights 51,634 54,270 5.11%Source: BIA, Credit Libanais Economic Research Unit
For the Nine-Month Period Ended
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
TotalPassengers
ArrivingPassengers
DepartingTravelers
TransitTravelers
5,902,116
2,934,756 2,960,064
7,296
BIA's Passengers up to September 2016
Source: BIA, Credit Libanais Economic Research Unit
Weekly Market Watch
SOURCE: BSE, BANK AUDI, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 9
BANK AUDI REPORTS NET PROFITS IN EXCESS OF $350 MILLION BY SEPTEMBER 2016
Bank Audi released its unaudited financial statements this week, conveying a solid annual increase of 15.18% in net after tax profits to $350.34 million by September 2016 (44% of which is attributed to foreign entities), up from $304.18 million in the same period of last year. The bank attributed the growth in its consolidated net profits to the development of the group’s affiliated banks mainly in Turkey and Egypt, whereby the increase in net profits in Odea Bank (Turkey) and Bank Audi Egypt contributed to 64% of the total increase in the group’s consolidated net profits. More specifically, Bank Audi witnessed an astounding rally of 321.66% in net fee and commission income to $819.52 million, coupled with some 6.80% increase in net interest income to $759.70 million and a 87.95% surge in net gains on financial instruments (financial assets and financial investments) to $160.30 million. Consequently, net operating income rose by 70.79% to $1.54 billion. In parallel, the bank’s total operating expenses rose by 50.28% y-o-y to $814.74 million. On the balance sheet front, Bank Audi’s consolidated assets widened by 7.11% during the first nine months of 2016 to around $45.27 billion of which 45% relates to entities outside Lebanon. Net loans & acceptances came in 4.94% higher during the first nine months of 2016 at $18.81 billion (of which 66% stems from entities outside Lebanon) while customer deposits concurrently increased by 3.80% over the same period to just above $36.96 billion (of which 42% stems from entities outside Lebanon). In this context, the bank’s ratio of net loans to customer deposits widened to 50.90% by the end of the third quarter of this year, with its shareholders’ equity propelling higher at just above $3.67 billion. It is worth noting that the increase in equity is in part attributed to some $302 million increase in provisions booked under tier 2 capital in preparation for the implementation of IFRS 9 in early 2018. As far as profitability ratios are concerned, Bank Audi reported an annualized return on average common equity (ROaCE) of 15.10% at end of September 2016 with the annualized return on average assets (ROAA) estimated at 1.10%. The group’s total capital adequacy ratio calculated according to Basel III standards reached 15.30% while the common equity tier 1 ratio stood at 9.90%.
CORPORATE NEWS
0
100
200
300
400
YTD September 2015 YTD September 2016
304.18350.34
Mill
ion
s of
US
D
Evolution of Bank Audi's Profitability
In Millions of USDAs at end of
2015As at end of
September 2016 % ChangeKey Balance Sheet FiguresTotal Assets 42,270.41 45,274.71 7.11%Net Loans & Acceptances 17,928.60 18,814.39 4.94%Customer Deposits 35,609.03 36,962.65 3.80%Shareholders' Equity 3,287.40 3,670.29 11.65%
Ratios (%)Net Loans & Acceptances to Customer Deposits 50.35% 50.90%Gross Doubtful Loans to Gross Loans 2.90% 3.20%
In Millions of USDYTD September
2015YTD September
2016 Y-O-Y % Change
Key P&L FiguresNet Interest Income 711.32 759.70 6.80%Net Commission and Fee Income 194.35 819.52 321.66%Net Operating Income 899.08 1,535.56 70.79%Total Operating Expenses 542.14 814.74 50.28%Net Profits 304.18 350.34 15.18%
Profitability and Adequacy Ratios (%)ROAA - 1.10%
ROaCE 13.80% 15.10%Primary Liquidity to Customers' Deposits Ratio 46.40% 54.90%Total Capital Adequacy Ratio (Basel III) 13.00% 15.30%Common Equity Tier 1 Ratio (Basel III) - 9.90%
Bank Audi
Source: BSE, Bank Audi, Credit Libanais Economic Research Unit
Weekly Market Watch
SOURCE: BSE, BYBLOS BANK, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 10
BYBLOS BANK REPORTS NET PROFITS OF AROUND $114 MILLION BY SEPTEMBER 2016
Byblos Bank released its unaudited financial statements this week conveying a shy annual increase of 0.51% in net after tax profits to $113.66 million by September 2016, up from $113.08 million in the same period last year. In details, the bank reported a 5.06% drop in net interest income to $183.92 million coupled with a 0.08% contraction in net commission & fee income to $60.75 million which outweighed the 13.56% rally in net gains on the financial instruments’ portfolio & other operating income to $103.09 million. The aforementioned results together with the 39.40% ($5.22 million) increase in credit loss expense to circa $18.50 million triggered a 0.84% y-o-y drop in net operating income to $329.27 million. Nevertheless, the bank reported a 68.59% ($15.99 million) drop in provisions for risk and charges in the first nine months of 2016 justifying the increase in net after tax profits. On the balance sheet front, Byblos Bank’s consolidated assets expanded by 3.54% during the first nine months of 2016 to $20.57 billion boosted by a 4.19% increase in net loans & advances to just below $5.14 billion. In parallel, customer deposits added 3.21% to just above $17.17 billion, with the ratio of net loans to customer deposits firming at 29.92% up from 29.64% at end of year 2015. The bank’s equity shed $14.78 million during the first nine months of 2016 to just below $1.70 billion as a result of some $11.86 million increase in foreign currency translation reserve. The bank’s capital adequacy ratio remained high at 16.30% (as per Basel III) as at end of September 2016 with a coverage ratio of above 100% according to a statement by the bank.
CORPORATE NEWS
112.60
112.80
113.00
113.20
113.40
113.60
113.80
YTD September 2015 YTD September 2016
113.08
113.66
Mil
lion
s o
f U
SD
Evolution of Byblos Bank's Profitability
Source: BSE, Byblos Bank, Credit Libanais Economic Research Unit
Byblos Bank
In Millions of USD
As at end of 2015
As at end of September 2016 % Change
Key Balance Sheet FiguresTotal Assets 19,869.24 20,571.92 3.54%Net Loans and Advances 4,930.93 5,137.74 4.19%Customer Deposits 16,636.91 17,171.50 3.21%Shareholders' Equity 1,713.73 1,698.94 -0.86%
Ratios (%)Net Loans to Customer Deposits 29.64% 29.92%Capital Adequacy (Basel III) 17.60% 16.30%
In Millions of USDYTD September
2015YTD September
2016 Y-O-Y % ChangeKey P&L FiguresNet Interest Income 193.73 183.92 -5.06%Net Commission and Fee Income 60.80 60.75 -0.08%Net Gain on Financial Instruments & Other Operating Income 90.78 103.09 13.56%
Net Operating Income 332.04 329.27 -0.84%Total Operating Expenses 168.10 176.21 4.83%Net Profits 113.08 113.66 0.51%Source: BSE, Byblos Bank, Credit Libanais Economic Research Unit
Weekly Market Watch
SOURCE: BSE, BANK OF BEIRUT, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 11
BANK OF BEIRUT’S NET PROFITS NEAR $150 MILLION BY SEPTEMBER 2016
Bank of Beirut published its unaudited financial statements this week, conveying some 8.43% annual increase in net after tax profits to $149.65 million during the first nine months of 2016, up from $138.02 million a year earlier. In details, net interest income rose by 11.74% y-o-y to $190.37 million while net commission & fee income increased by 6.65% to $61.86 million outweighing the 12.09% contraction in net gain on financial instruments & other operating income to $66.60 million. This, along with the 53.88% ($3.43 million) drop in credit loss expense to $2.94 million has led to a 5.66% y-o-y increase in the bank’s net operating income to $314.61 million. On the balance sheet front, Bank of Beirut's total assets widened by 7.38% y-o-y to $16.52 billion from around $15.39 billion as at end of September 2015. In parallel, customer deposits increased by 5.15% to just below $12.09 billion, with net loans & advances expanding by 11.54% to $4.65 billion. Consequently, the bank’s ratio of net loans to customer deposits rose to 38.47%, from 36.27% as at end of Q3-2015. On the capitalization front, the bank’s shareholders’ equity rallied by 15.56% on a yearly basis to $2.30 billion by September 2016, from $1.99 billion during that same period last year.
CORPORATE NEWS
In Millions of USD As at End of September 2015
As at End of September 2016 % Change
Key Balance Sheet FiguresTotal Assets 15,385.66 16,521.39 7.38%Net Loans and Advances 4,168.75 4,649.78 11.54%Customer Deposits 11,495.16 12,087.33 5.15%Shareholders' Equity 1,992.12 2,302.03 15.56%
Ratios (%)Net Loans to Customer Deposits 36.27% 38.47%
In Millions of USD YTD Q3 2015 YTD Q3 2016 Y-O-Y% Change
Key P&L FiguresNet Interest Income 170.37 190.37 11.74%Net Commission and Fee Income 58.00 61.86 6.65%Net Gain on Financial Instruments & Other Operating Income
75.76 66.60 -12.09%
Net Operating Income 297.77 314.61 5.66%Total Operating Expenses 139.45 142.89 2.46%Net Profits 138.02 149.65 8.43%
Bank of Beirut
Source: BSE, Bank o f Beirut, Credit Libanais Economic Research Unit
130.00
135.00
140.00
145.00
150.00
YTD Q3 2015 YTD Q3 2016
138.02
149.65
Mill
ion
s of
US
D
Evolution of Bank of Beirut's Profitability
Weekly Market Watch
SOURCE: BSE, BANK BEMO, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 12
BANK BEMO’S NET PROFITS AT $10.39 MILLION BY Q3-2016
Bank BEMO published its unaudited financial statements for the first three quarters of 2016 conveying a 0.61% annual increase in net after tax profits to $10.39 million, up from $10.32 million YTD September 2015. This shy increase in profitability is mainly attributed to the 8.24% y-o-y expansion in net interest income to $19.60 million coupled with some 9.92% hike in net commission & fee income to $4.40 million, which outweighed the 34.10% rally in allowance for impairment of loans and advances to $1.40 million and the 9.30% drop in the write-back of collective provisions to $264.29 thousand. On the balance sheet front, Bank BEMO's consolidated assets widened by 5.53% in the first nine months of 2016 to $1.71 billion, up from $1.62 billion as at end of year 2015, thanks to the 4.90% increase in net loans & advances to just above $708 million. Customer deposits concurrently rose by 1.81% to nearly $1.38 billion. Consequently, the Bank’s ratio of net loans to customer deposits came in higher at 51.45% at end of September 2016, in comparison with 49.93% at end of 2015. In parallel, the bank managed to grow its shareholders’ equity by 3.31% YTD September 2016 to $139.04 million, from $134.58 million as at year-end 2015.
CORPORATE NEWS
10.28
10.30
10.32
10.34
10.36
10.38
10.40
YTD Q3-2015 YTD Q3-2016
10.32
10.39
Mill
ion
s o
f U
SD
Evolution of BEMO Bank's Profitability
In Millions of USDAs at End of
2015As at End of
September 2016 % ChangeKey Balance Sheet FiguresTotal Assets 1,621.08 1,710.77 5.53%Net Loans & Advances 675.37 708.47 4.90%Customer Deposits 1,352.54 1,377.03 1.81%Shareholders' Equity 134.58 139.04 3.31%
Ratios (%)Net Loans & Advances to Customer Deposits 49.93% 51.45%
In Millions of USD YTD Q3-2015 YTD Q3-2016Y-O-Y
% ChangeKey P&L FiguresNet Interest Income 18.11 19.60 8.24%Net Commission and Fee Income 4.00 4.40 9.92%Net Financial Revenues 28.80 33.52 16.38%Total Operating Expenses 18.99 19.93 4.93%Net Profits 10.32 10.39 0.61%
Bank BEMO
Source: BSE, Bank BEMO, Credit Libanais Economic Research Unit
Weekly Market Watch
SOURCE: BSE, HOLCIM (LIBAN), CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 13
HOLCIM (LIBAN) TO DECREASE ITS CAPITAL
According to the minutes of the meeting of Holcim (Liban) S.A.L.’s Board of Directors convened on October 18, 2016 and an announcement issued by the company both circulated by the Beirut Stock Exchange on October 24, 2016, the company will implement a previous Extraordinary General Assembly decision dated December 2010 to reduce the share nominal value by LBP 5,000. Consequently, the share capital of Holcim (Liban) will be reduced from LBP 195,160.40 million to LBP 97,580.20 million, with the reduction proceeds to be distributed to the company’s shareholders starting November 17, 2016. It is worth noting that the total number of shares of Holcim (Liban) will remain unchanged at 19,516,040 shares. BSE ANNOUNCES DELISTING OF MATURING EUROBONDS
According to the Beirut Stock Exchange (BSE) circular number 433/2016 and dated October 24, 2016, the BSE announced the delisting of the Republic of Lebanon (ROL) Eurobond issue number 59 having a face value of $500 million, and this becoming effective as at the end of the trading session of October 28, 2016. The bonds, which are denominated in USD, carry a coupon rate of 4.75% and mature this November.
CORPORATE NEWS
MONETARY AGGREGATES
The overall money supply, “M4”, widened by LBP 53.28 billion during the week of October 13, 2016 to LBP 204,870 billion, notwithstanding the LBP 19 billion drop in the non-banking sector Treasury bills portfolio. On the other hand, Lebanese-pound denominated deposits and currency in circulation, “M1”, shed LBP 201.19 billion week-on-week to LBP 9,225 billion on the back of some LBP 111 billion contraction in money in circulation and a LBP 90 billion drop in demand deposits. Local currency term deposits, “M2”, also lost some LBP 237.06 billion on a weekly basis, yet registered a 4.48% year-on-year increase to LBP 81,241 billion. Consequently, private sector term and saving deposits denominated in LBP (“M2- M1”) edged slightly lower to LBP 72,017 billion, while deposits denominated in foreign currencies (“M3–M2”) firmed at LBP 112,786 billion. MONEY MARKETS
The October 20th Treasury bill auction raised LBP 119.606 billion ($79.34 million), compared to LBP 321.439 billion ($213.23 million) in the auction of the previous week.
Subscriptions were majority (53.11%) concentrated in the five-year to maturity T-bonds, followed by the one-year (28.82%) and three-month (18.06%) tenure bills.
Consequently, the weighted average yield on Lebanese Pound Treasury bills stood at 5.92% in the auction of October 20. The yields on the three-month, one-year, and five-year to maturity Treasury securities remained flat at 4.44%, 5.35%, and 6.74% respectively.
MONETARY PERFORMANCE
Weekly Market Watch
SOURCE: BDL, REUTERS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 14
3 Months
6 Months
12 Months
24 Months
36 Months
60 Months
84 Months
120 Months
180 Months
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
0 1 2 3 4 5 6 7 8 9 10
On The Run Yield Curve
Lebanese Treasury Bills 3 Months 6 Months 12 Months 24 Months 36 Months 60 Months 84 Months 120 Months 180 MonthsTreasury Yield 4.44% 4.99% 5.35% 5.84% 6.50% 6.74% 7.08% 7.46% 7.90%
Mone y Supply
LBP Billion
M1 9 ,4 2 6 9 ,2 2 5 - 2 .13 %
M2 8 1,4 7 8 8 1,2 4 1 - 0 .2 9 %
M3 19 3 ,9 5 4 19 4 ,0 2 7 0 .0 4 %
M4 2 0 4 ,8 17 2 0 4 ,8 7 0 0 .0 3 %
M2 - M1 7 2 ,0 5 3 7 2 ,0 17 - 0 .0 5 %
M3 - M2 112 ,4 7 6 112 ,7 8 6 0 .2 8 %Source: Banque Du Liban, Credit Libanais Economic Research Unit
Oc tobe r 6 , 2 0 16 Oc tobe r 13 , 2 0 16 % Cha nge
6,000
26,000
46,000
66,000
86,000
October 6,2016
October 13,2016
204,817 204,870193,954 194,027
Money Supply - LBP Billion -
M4 M3
Source: BDL, Credit Libanais Economic Research Unit
Lebanese Treasury Bills
Yield (%) Face Value (in billions
of LBP)
% of Total Face Value
3 Months 4.44% 21.603 18.06%12 Months 5.35% 34.476 28.82%60 Months 6.74% 63.527 53.11% Total 119.606 100.00%Source: Reuters, Credit Libanais Economic Research Unit
October 20, 2016
LEBANESE EQUITIES
Activity on the Beirut Stock Exchange continued to flourish this week amid eminent signs of hope surrounding the presidential elections, restoring investors’ appetite. BSE activity was also boosted by a block trade on BLOM Bank listed shares involving more than a million stocks, large traded chunks on Bank Audi listed shares (around 700 thousand shares) ahead of the release of satisfactory third quarter financial results, and the disposal of nearly 8 million BEMO Bank listed shares (worth around $12.24 million) by one shareholder to his three children. In this context, the number of shares changing hands skyrocketed to 10,659,880 shares, up from 2,691,863 shares last week, with value traded rallying to around $41.52 million, from $30.04 million a week before. The contribution of banking sector stocks of total weekly traded volume stood at 91.52% this week, compared to 56.66% last week.
In parallel, the average daily trading volume soared to 2,131,976 shares this week, from 538,373 shares last week. Similarly, the average daily trading value widened to just over $8.30 million, from about $6.01 million a week earlier. Seven gainers and five losers were spotted this week, lifting the BSE’s market capitalization up by 1.49% week-on-week to nearly $11.88 billion and the Credit Libanais Aggregate Stock Index (“CLASI”) higher by 1.74% to a new year-high of 1,156.45.
In the real estate sector, trades mainly consisted of Solidere “A” and “B” shares (8.44% of total traded volume), with the price of Solidere “A” surging by 8.81% to $12.48 and that of Solidere “B” increasing by 5.53% to $12.22. This can be explained by investors’ optimism vis-à-vis the soon expected presidential elections. Consequently, the Credit Libanais Construction Sector Stock Index (“CLCI”) ended its week up by 6.11% at 679.17, recording its highest level since September 8, 2014.
In the banking sector, BEMO Bank listed shares amassed the highest concentration of trades (71.74% of total traded volume) on a turnover ratio of 14.88%. The Credit Libanais Financial Sector Stock Index (“CLFI”) inched 0.48% higher this week to 1,458.93 amid the 0.65% appreciation in the price of Bank Audi listed shares to $6.24, the 3.87% hike in the price of Bank Audi GDRs to $6.44, the 1.83% increase in the price of Byblos Bank listed shares to $1.67, and the 0.49% rise in the price of BLOM Bank GDRs to $10.35, which altogether outweighed the 0.99% drop in the price of BLOM Bank listed shares to $10.00 and the 6.98% slump in the price of BEMO Bank listed shares to $1.60.
LEBANESE EQUITIES
Weekly Market Watch
SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 15
Credit Libanais Week of Week of Weekly YTDIndices 21-Oct-16 28-Oct-16 % Change % ChangeCredit Libanais AggregateStock Index <.CLASI> 1,136.69 1,156.45 1.74% 8.30%
Credit Libanais FinancialSector Stock Index <.CLFI> 1,452.03 1,458.93 0.48% 5.23%
Credit Libanais ConstructionSector Stock Index <.CLCI> 640.04 679.17 6.11% 19.81%
.CLASI Credit Libanais Aggregate Stock Index
Value Daily % Chng Daily Net Chng
1,156.45 2.450% 16.24
Yr.High Year Hi.Date Yr.Low Year.Lo.Date
1,156.45 28-Oct-16 1,065.48 9-Mar-16
Life High Life Hi.Date Life Low Life.Lo.Date
1,801.01 7-Jul-08 836.11 25-Mar-09
Friday, October 28, 2016
1,000
1,020
1,040
1,060
1,080
1,100
1,120
1,140
1,160
1,180
28-O
ct-1
5
19-D
ec-1
5
09-F
eb-1
6
01-A
pr-1
6
23-M
ay-1
6
14-J
ul-1
6
04-S
ep-1
6
26-O
ct-1
6
Ind
ex V
alu
e
Credit Libanais Aggregate Stock IndexWeekly Performance
CLASI
CLASI 1.74%
1,300
1,320
1,340
1,360
1,380
1,400
1,420
1,440
1,460
1,480
28-O
ct-1
5
19-D
ec-1
5
09-F
eb-1
6
01-A
pr-1
6
23-M
ay-1
6
14-J
ul-1
6
04-S
ep-1
6
26-O
ct-1
6
Ind
ex V
alu
e
Credit Libanais Financial Sector Stock IndexWeekly Performance
CLFI
CLFI 0.48%
450
500
550
600
650
700
28-O
ct-1
5
19-D
ec-1
5
09-F
eb-1
6
01-A
pr-1
6
23-M
ay-1
6
14-J
ul-1
6
04-S
ep-1
6
26-O
ct-1
6
Ind
ex V
alu
e
Credit Libanais Construction Sector Stock IndexWeekly Performance
CLCI
CLCI 6.11%
The weighted average price to earnings (P/E) and price to book (P/BV) multiples of listed stocks sustained their upturn for the second consecutive week, ending Friday’s session significantly higher at 9.960x and 0.932x respectively.
LEBANESE EQUITIES
Weekly Market Watch
SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 16
Previous Last % ChangeValue Traded ($) 30,040,412 41,517,531 38.21%Volume Traded 2,691,863 10,659,880 296.00%Average Daily Trading Value ($) 6,008,082 8,303,506 38.21%Average Daily Trading Volume 538,373 2,131,976 296.00%Market Cap - BSE ($) 11,701,310,648 11,875,108,893 1.49%Weighted Average P/E 9.714 9.960 2.53%Weighted Average P/BV 0.915 0.932 1.78%Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit
Activity Analysis
Source: BSE, Credit Libanais Economic Research Unit
0
2
4
6
8
10
Oct 21, 2016 Oct 28, 2016
9.714 9.960
0.915 0.932
Evolution of Beirut Bourse Comparable Benchmarks
P/E P/BV
P/E P/BV
Solidere A $12.48 8.81% 677,411 6.35% $8,164,508 19.67% 100,000,000 $1,248,000 14.34 1.02 12.84% 1.80% 1.71% 14.55%Solidere B $12.22 5.53% 222,782 2.09% $2,672,442 6.44% 65,000,000 $794,300 14.05 1.00 10.39% 1.84% 1.75% 12.14%BLC Bank $1.69 0.00% - - - - 71,033,333 $120,046 8.45 0.68 -0.59% 15.38% 14.61% 14.03%BLC Bank Preferred Class "B" $100.00 0.00% - - - - 550,000 $55,000 n.a n.a -2.44% 6.65% 6.32% 3.88%BLC Bank Preferred Class "C" $100.00 0.00% - - - - 350,000 $35,000 n.a n.a -0.99% 6.41% 6.09% 5.10%BLC Bank Preferred Class "D" $100.00 0.00% - - - - 750,000 $75,000 n.a n.a 0.00% - - -Bank Audi - Listed Shares $6.24 0.65% 710,032 6.66% $4,430,600 10.67% 399,749,204 $2,494,435 6.18 0.88 3.14% 6.41% 6.09% 9.23%Bank Audi GDR $6.44 3.87% 5,500 0.05% $35,306 0.09% 114,988,117 $740,523 6.38 0.90 7.33% 6.21% 5.90% 13.23%Bank Audi Preferred "F" $100.50 0.00% - - - - 1,500,000 $150,750 n.a n.a -1.18% 5.97% 5.67% 4.49%Bank Audi Preferred "G" $101.80 0.00% - - - - 1,500,000 $152,700 n.a n.a 0.79% 5.89% 5.60% 6.39%Bank Audi Preferred "H" $101.00 0.00% - - - - 750,000 $75,750 n.a n.a -0.49% 6.44% 6.11% 5.62%Bank Of Beirut - Listed Shares $18.80 0.00% - - - - 17,746,417 $333,633 10.93 1.27 0.00% 3.18% 3.02% 3.02%Bank Of Beirut Priority Shares 2014 $21.00 0.00% - - - - 4,762,000 $100,002 12.21 1.42 0.00% 4.00% 3.80% 3.80%Bank Of Beirut Preferred "H" $26.25 0.00% 12,000 0.11% 315,000 0.76% 5,400,000 $141,750 n.a n.a -0.94% 6.67% 6.33% 5.39%Bank Of Beirut Preferred "I" $26.00 0.00% - - - - 5,000,000 $130,000 n.a n.a -1.89% 6.49% 6.17% 4.28%Bank Of Beirut Preferred "J" $26.25 0.96% 600 0.01% $15,750 0.04% 3,000,000 $78,750 n.a n.a 1.94% 6.19% 5.88% 7.82%Bank Of Beirut Preferred "K" $25.00 0.00% - - - - 4,000,000 $100,000 n.a n.a 0.00% - - -Byblos Bank - Listed Shares $1.67 1.83% 46,182 0.43% $76,658 0.18% 565,515,040 $944,410 9.28 0.78 3.73% 7.94% 7.55% 11.27%Byblos Bank Preferred Class 2008 $101.10 0.00% - - - - 2,000,000 $202,200 n.a n.a -0.10% 7.91% 7.52% 7.42%Byblos Bank Preferred Class 2009 $101.40 0.00% - - - - 2,000,000 $202,800 n.a n.a 0.80% 7.89% 7.50% 8.29%Byblos Bank GDR $79.00 0.00% - - - - 1,309,078 $103,417 8.78 0.73 -1.25% 8.40% 7.98% 6.73%BEMO Bank - Listed Shares $1.60 -6.98% 7,647,311 71.74% $12,235,698 29.47% 51,400,000 $82,240 8.00 0.98 -15.79% 2.36% 2.25% -13.54%BEMO Bank Preferred Class 2013 $99.50 -0.50% 2,000 0.02% $199,000 0.48% 350,000 $34,825 n.a n.a -0.50% 7.04% 6.68% 6.18%BLOM Bank GDR $10.35 0.49% 51,799 0.49% $533,522 1.29% 73,896,010 $764,824 11.90 0.91 6.15% 8.01% 7.61% 13.76%BLOM Bank Listed Shares $10.00 -0.99% 1,271,000 11.92% $12,711,400 30.62% 215,000,000 $2,150,000 11.49 0.88 6.38% 8.29% 7.88% 14.26%BLOM Bank Preferred Class 2011 $10.00 0.00% 10,000 0.09% $100,000 0.24% 20,000,000 $200,000 n.a n.a -1.48% 7.00% 6.65% 5.17%RYMCO Class "B" $3.25 0.00% - - - - 10,920,000 $35,490 14.13 1.67 0.62% 3.37% 3.20% 3.82%Holcim Liban $15.80 -0.44% 1,583 0.01% $25,011 0.06% 19,516,040 $308,353 7.09 1.31 8.82% 5.12% 4.86% 13.68%Ciment Blancs Bearer $2.70 0.00% - - - - 6,000,000 $16,200 4.91 1.23 -30.77% 10.64% 10.11% -20.66%Ciment Blancs Nominal $1.57 -49.35% 1,680 0.02% 2,638 0.01% 3,000,000 $4,710 2.85 0.71 -49.35% 18.29% 17.38% -31.97%
% of Weekly Volume Traded
% of Weekly Value Traded
Gross Dividend
Yield
Net Dividend
Yield
YTD Total Net
Return
Lebanese Equities
YTD Price Perf.
Weekly Volume Traded
Note: n.a stands for not applicable
Market Capitalisation
($000)BEIRUT STOCK EXCHANGE
Weekly Value Traded
Total Listed Shares
Weekly %Change
Closing
Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit
LEBANON’S MAIN INDICATORS
Weekly Market Watch
SOURCE: BDL, ABL, MOF, IMF, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 17
2 0 0 9 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16
MACROECONOMIC INDICATORS
GDP ($ Billion) 35.14 38.01 40.08 44.10 47.60 49.94* 51.17* 52.80*
Real GDP Growth Rate 10.30% 8.00% 0.90% 2.80% 2.50% 2.00%* 1.00%* 1.00%*
GDP Per Capita ($) 8,274 8,756 9,144 9,966 10,655 11,073* 11,237* 11,484*
Net Foreign Direct Investment ($ Billion) 4.84 4.96 3.40 2.30 3.79
FDI/GDP Ratio 13.77% 13.05% 11.79% 7.86% 12.71%
INDUSTRY
Industrial Exports ($ Million) 2,595 3,291 3,530 2,952 3,076 3,150 2,956 1,713 (6)
Import of Industrial Machinery ($ Million) 199 227 239 288 300 269 234 167 (6)
TOURISM
Total Number of Tourists 1,851,081 2,167,989 1,655,051 1,365,845 1,274,362 1,354,647 1,517,927 955,813 (5)
Growth in Tax- Free Spending 13% 21% 10% - 6% 4% 8% 2% - 10% (7)
REAL ES TATE
Value of Real Estate Transactions ($ Million) 6,958 9,479 8,841 9,175 8,708 8,952 8,006 6,118 (7)
Number of Real Estate Sales Transactions 83,465 94,202 82,984 74,569 69,198 70,721 63,386 45,848 (7)
Construction Permits (000 sqm) 11,509 15,187 13,980 12,362 10,527 11,164 10,294 7,483 (7)
Cement Delivery (000 tons) 4,897 5,227 5,550 5,309 5,831 5,517 5,043 3,414 (6)
TRANSPORTATION
Beirut Port: Freight Activity (000 Tons) 5,769 6,469 6,677 7,225 8,268 8,281 7,240 6,600 (7)
Beirut Airport: Number of Passengers (million) 4.74 5.55 5.65 5.96 6.26 6.57 8.22 5.90 (7)
FOREIGN TRADE
Imports ($ Million) 16,242 17,964 20,158 21,280 21,228 20,494 18,069 12,792 (6)
Exports ($ Million) 3,484 4,253 4,265 4,483 3,936 3,313 2,952 1,974 (6)
Trade Balance ($ Million) (12,758) (13,711) (15,893) (16,797) (17,292) (17,181) (15,117) (10,818) (6)
BALANCE OF PAYMENTS
Net Foreign Assets at the Financial Sector ($ Million) 7,899 3,325 (1,996) (1,537) (1,127) (1,407) (3,354) 366 (6)
Foreign Assets ($ Billion) 28.30 30.85 32.24 35.74 35.29 37.86 37.09 40.77 (9)
PUBLIC FINANCE
Government Expenditures ($ Million) 11,388 11,336 11,675 13,321 13,640 13,952 13,528 7,273 (4)
Government Revenues ($ Million) 8,428 8,414 9,333 9,396 9,420 10,879 9,576 5,337 (4)
Budget Primary Defic it / Surplus ($ Million) 3,380 1,203 1,662 (110) (240) 1,307 724 495 (4)
Total Defic it ($ Million) (2,960) (2,894) (2,342) (3,925) (4,220) (3,073) (3,952) (1,936) (4)
Defic it / GDP Ratio 8.42% 7.61% 5.84% 8.90% 8.87% 6.14% 7.26%
Debt Service / GDP Ratio 11.49% 10.85% 9.99% 8.21% 7.96% 8.75% 8.60%
Net Public Debt ($ Billion) 44.11 45.01 46.35 49.12 53.18 57.30 61.54 64.09 (6)
Gross Public Debt/GDP Ratio 145.57% 138.39% 133.89% 130.80% 133.36% 133.28% 139.08%
MONETARY AGGREGATES & INFLATION
M4 ($ Billion) 87.08 97.31 103.50 110.00 117.41 124.53 131.17 135.90 (8)
(M2- M1) ($ Billion) 31.14 35.66 35.82 39.32 40.56 43.27 46.25 47.77 (8)
Monetization Level (M2/GDP Ratio) 97.35% 103.46% 99.32% 99.44% 95.68% 97.34% 101.74%
Change in CPI (%) 4.20% 6.19% 4.27% 4.68% 2.05% - 1.66% - 3.40% 1.03% (7)
BANKING SYSTEM
Number of Commercial Banks 53 54 54 54 56 55 53 53 (1)
Number of Branches 885 912 948 962 985 1,020 1,039 1,039 (1)
Total Assets ($ Million) 115,250 128,925 140,576 151,883 164,821 175,697 185,989 195,774 (6)
Total Deposits ($ Million) 96,821 108,601 117,703 127,657 139,166 147,637 154,951 160,417 (6)
Loans to the Private Sector ($ Million) 28,374 34,929 39,375 43,452 47,381 50,899 54,224 56,448 (6)
Customer Loans/ Deposits 29.31% 32.16% 33.45% 34.04% 34.05% 34.48% 34.99% 35.19% (6)
Dollarization Rate 64.46% 63.24% 65.92% 64.82% 66.10% 65.71% 64.88% 64.76% (6)
Net Profit - After Tax ($ Million) 1,429 1,838 1,743 1,620
Exchange Rate (LBP to USD) 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50
* Figures Reflect IM F Estimates
(1) As at End o f M arch, 2016, (2) As at End o f April, 2016, (3) As at End o f M ay, 2016, (4) As at End o f June, 2016, (5) As at End o f July, 2016, (6) As at End of August, 2016, (7) As at End of September, 2016
Recap of Lebanon's Major Indicators
(8) As at October 13, 2016, (9) As at M id-October, 2016
LEBANON’S RATINGS
Weekly Market Watch
SOURCE: S&P, MOODY’S, FITCH, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 18
Rating Agency Tenor Rating
Long- Te rm B-
Short- Te rm B
Moody's Inve stors Se rvic e Long- Te rm B2
Fitc h Ra tings Long- Te rm B-
Short- Te rm B-
Source: S&P Global Ratings, M oody's Investors Service, Fitch Ratings
Stable
S table
Ne ga tive
Republic Of Lebanon Sovereign Ratings
Outlook
Sta nda rd & Poor's Globa l Ra tings
Rated Banks
Long Term Foreign Currency
Financial Strength
Outlook Long Term
IDR
Outlook Long-Term Counterparty Credit Rating
Short-Term Counterparty Credit Rating
Outlook
Bank Audi B2 E+ Negative B- Stable B- C Stable
BLOM Bank B2 E+ Negative - - B- - Stable
Credit Libanais - - - - - - - -
Byblos Bank B2 E+ Negative B- Stable - - -
BBAC - - - - - - - -
Fransabank - - - - - - - -
BankMed - - - - - B- C Stable
S&P Global Ratings
Lebanese Banks' Latest Ratings
Moody's Investors Service Fitch Ratings
Sources: M oody's Investors Service, Fitch Ratings, S&P Global Ratings
CONTACTS
RESEARCH
Fadlo I. Choueiri, CFA
961-1-608 000 EXT: 1280 Jad Abi Haidar, CFA [email protected] 961-1-608 000 EXT. 1283
Joelle Samaha [email protected] 961-1-608 000 EXT. 1281 Mayda Zaarour [email protected] 961-1-608 000 EXT. 1282
Nagham Abdel Ahad [email protected] 961-1-608 000 EXT. 1284
MONEY MARKETS DESK
Robert Araman
961-1-608 000 EXT. 0760
This document is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. This document does not constitute an offer or invitation to subscribe to or purchase any security, and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. Reasonable care has been taken to ensure that the facts stated herein are accurate and the estimates, opinions and expectations contained herein are fair and reliable.
Weekly Market Watch
ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231 19