full weekly market watch 201002

7/28/2019 Full Weekly Market Watch 201002

1/21

ECONOMIC RESEARCH UNIT

ISSUE NO.228DECEMBER28TH 2009JANUARY 2ND2010

WEEKLY MARKET WATCH

Credit Libanais


2/21

TABLE OF CONTENTS

LLEEBBAANNOONNNEWS

THE YEAR 2009 IN REVIEW 1ECONOMI C I NSI GHTS

> Lebanon Ranks First in the Middle East interms of Internet Experts 4

> Lebanons MasterIndex of Consumer PurchasingResilience in the Second Half of 2009 5

> Lebanons MasterIndex of Consumer PurchasingPriorities in the Second Half of 2009 6

> Ministry of Telecommunications Transfers $150Million to the Treasury 6

> Balance of Trade Through November 2009 7> UNDP Releases Report on Development Challenges

for the Arab Region 8

CORPORATE NEWS

> Bank of Beirut Lists New Preferred Shares On The BSE 9

MONETARY P ERFORMANCE

> Monetary Aggregates 10> Money Markets 10

FOREI GN EXCHANGE

>> Foreign Exchange 11

LEBANESE EQUI TI ES & GDRs

> Lebanese Equities & Credit Libanais Indices 12> Lebanese GDRs 13

Lebanon's Economic & Financial Sector Indicators 14

Lebanons Ratings 15

UU..SS..MMAARRKKEETTSS

> Jobless Claims in the Fourth Week of December 2009 16> Consumer Confidence Index in December 2009 16> Home Price Index In October 2009 16> U.S. Treasury 16

> U.S. Market Indices 16

LEBANON RANKS FIRST IN TMIDDLE EAST IN TERMS INTERNET EXPERTS

According to the Internet Usage the Middle East report published Bayt.com, one of the leading jsites in the Middle East regioLebanon ranked first in the MiddEast in terms of internet capabilitwith 40% of Lebanese considered internet experts.

LEBANONS MASTERINDEX CONSUMER PURCHASINRESILIENCE IN THE SECOND HAOF 2009

In Lebanon, spending on childrenextra-curricular activities/privatuition is the most resilient spending cutbacks with the indscoring 98.9, positioning Lebanon such 1st among 11 countries.

UNDP RELEASES REPORT ODEVELOPMENT CHALLENGES FOTHE ARAB REGION

The United Nations DevelopmeProgram (UNDP) published

December 20, 2009 a report titlDevelopment Challenges for tArab World in which it screens tmain social and economdevelopment challenges facing tArab World.

CONSUMERCONFIDENCE INDEX INDECEMBER2009

The U.S. Conference Board conveythat the U.S. consumer confidenindex rose for the second consecutimonth by 4.55% to 52.9 December 2009.

Weekly Market Watch

ECONOMIC RESEARCHUNITSOFIL CENTER BEIRUT -LEBANONTEL:01-200028/9 FAX:01-326786


3/21

"BDL" Banque Du Liban

"ABL" Association of Banks in Lebanon

"MOF" The Lebanese Ministry ofFinance

"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 + DemandDeposits in LBP

"M2" M1 + Other Deposits in LBP

"M3" M2 + Deposits in Foreign Currencies

"M4" M3+ Treasury Bills Held By NonBanking System, Including AccruedInterests

"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

"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

Weekly Market Watch

ECONOMIC RESEARCHUNIT

SOFIL CENTER BEIRUT -LEBANONTEL:01-200028/9 FAX:01-326786

SYNOPSIS OF TERMS


4/21

"Y-O-Y" Year-On-Year

"GDP" Gross Domestic Product

"MENA" Middle East and North Africa

"FOMC" Federal Open Market Committee

LE Livre Egyptienne Egyptian Pound

SAR Saudi Arabian Riyal

AED United Arab Emirates Dirham

BD Bahraini Dinar

Weekly Market Watch

ECONOMIC RESEARCHUNIT

SOFIL CENTER BEIRUT -LEBANONTEL:01-200028/9 FAX:01-326786

SYNOPSIS OF TERMS


5/21

THE YEAR2009 INREVIEW

Weekly Market Watch

SOURCE:CREDIT LIBANAIS ECONOMICRESEARCH UNIT

1

The year 2009 was a prosperous year for the Lebanese economy, marked by an unprecedented rebound ineconomic growth that eclipsed the growth in most regional and international economies. More particularly,and according to the IMFs October 2009 World Economic Outlook, the Lebanese economy was projected togrow by 7% in real terms during the year 2009, only to be outpaced by Qatars 11.467% projected growthon a regional basis, in comparison with a negative 1.1% expected growth for the Global economy, anegative 2.7% growth for the United States, a negative 4.2% growth for the Euro area and some 2% realgrowth for the Middle East region. The Lebanese economys astounding performance can be mainlyattributed to the undisputed resilience of the Lebanese banking sector to the global financial crisis, theensuing regained level of confidence in the Lebanese economy, the more relaxed political scene coupled

with the tangible improvements in the countrys public finances.

In this context, Lebanon witnessed a substantial increase in cash inflows and Foreign Direct Investments(FDIs) into the Lebanese economy, with capital inflows expanding 25% on an annual basis to attain $10.6billion in the first seven months of the year 2009 and some $16 billion over the one-year period endingJuly 2009. Remittances from Lebanese expatriates remained at robust levels, notwithstanding the globalcredit crunch and massive lay-offs regionally and internationally with the World Bank expecting remittancesto attain $7 billion by year-end 2009, thus accounting for around 22% of remittances in the MENA region.Lebanon continued to attract Foreign Direct Investment in the year 2009 with the bulk of investmentsbeing channeled towards the real estate and construction sector. In this perspective, the number of realestate transactions attained 55,482 in the first three quarters of 2009 with the value of real estatetransactions standing at $4,333.90 million. In parallel, construction activity preserved its solid momentumwith construction permits firming to 1,002,524 sqm in the first eleven months of the year.

The much improved political arena, which was characterized by the smooth flow of the parliamentaryelections in mid 2009 and the formation of a national unity government in November 2009, restored thelevel of confidence in the Lebanese economy, translating as such into a vivid tourism season andconsequently a spike in tourism activity. In this context, total number of tourists grew markedly by 43.50%on an annual basis to 1,713,430 tourists up to November 2009, in comparison with 1,193,831 in the sameperiod in 2008. Moreover, and according to Deloittes September 2009 report on hotel Performance in theMiddle East, Beirut achieved the highest increase in both revenue per available room (revPAR) andoccupancy rate in the Middle East/Africa region during the month of September. More particularly, Beirutachieved an astounding annual 146% increase in revPAR in September 2009 to $148.70, markedlyoutpacing the 1.9% decline in revPAR in the Middle East region to $62.07. Hotel average occupancy ratewas no exception, averaging 58% in September 2009 in comparison with 52.8% in the Middle East region.Moreover, the Global Refund on Tax Free shopping report unveiled a considerable 13% y-o-y expansion inLebanons tax-free spending through November 2009. This owes, in the first place, to a 61% rally inspending by Syrian travelers, coupled with a 40% upswing in tax-free spending by Egyptian visitors.

Lebanons main economic indicators remained strong with foreign assets burgeoning to $28.30 billion as atyear-end 2009 from $19.73 billion just 12 months earlier. Furthermore, the Lebanese governmentsucceeded in alleviating Lebanons high debt to GDP ratio which dwindled to 153% in June 2009 accordingto the IMF 2009 Article IV consultation down from 180% in 2006. In a related new, Moodys InvestorsService, the international rating agency, projected Lebanons fiscal deficit to GDP ratio to shrink to 6.3% in2012 down from 9.9% in 2008.

Said accomplishments didnt go unnoticed, with IMF and World Bank officials lavishing praise on theLebanese Central Bank for its prudent yet efficient policies and the Lebanese banking sector for its abilityto withstand the global financial crisis. Rating agencies were no exception with Moodys Investors Serviceupgrading in April 2009 Lebanons local and foreign currency government bond ratings to B2 from B3before changing the outlook on Lebanons government bond issuer ratings from Stable to Positive on

December 18, 2009. Lebanon ended the year 2009 on a high note, with Standard & Poors, theinternational rating agency, upgrading in its December 22nd review on the countrys short-term and long-

term sovereign credit ratings from C and B- to B and B on a respective basis .


6/21

In the banking sector, the consolidated balance sheet of commercial banks posted a stellar 23.37% annualincrease in total consolidated assets to $111.57 billion as at end of October, from $90.43 billion in October2008. Concurrently, customer deposits grew by 23.46% to $93.40 billion with the deposit dollarization rateprolonging its downturn to 64.72%, from 69.70% in the same period in 2008. On the lending front,commercial banks consolidated lending activity reached $23.61 billion, up from $20.75 billion in thepreceding year. Nevertheless, the loans to deposits ratio skidded to 25.28% as at the end of October 2009down from 27.43% a year earlier.

The performance of the banking sector in the year 2009 prompted the rating agency, Moodys InvestorsService in its report dated December 21, 2009 to change the outlook on foreign currency deposit ratingsfor Bank Audi, BLOM Bank, Byblos Bank and Bank of Beirut from Stable to Positive. The rating agency,however, downgraded the long-term global local currency (GLC) deposit ratings for Bank Audi, BLOM Bankand Byblos Bank from Ba2 to Ba3.

On the public finance front, Lebanons fiscal deficit (budgetary & treasury) widened to $2.41 billion in thefirst ten months of 2009 from $2.01 billion in the same period last year. The primary surplus rose by9.49% to $904.41 million compared to a surplus of $892.22 million a year earlier. Government revenuesgrew markedly by 20.97% to $7.11 billion, counterbalanced by some 19.68% increase in governmentexpenditures (including debt service) to $9.52 billion. The increase in expenditures was mainly attributed

to a $336.98 million rise in interest payments coupled with an $88.88 million increase in spending onElctricit Du Liban EDL. The deficit to total expenditures ratio remained almost flat at 25.33% incomparison with 25.28% a year earlier.

THE YEAR2009 INREVIEW (CTD.)

Weekly Market Watch


2

Act ivi ty In Th e L eb ane se Bank ing Sector

0.00

20.00

40.00

60.00

80.00

100.00

Oct-04 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Loans (USD Billion) Deposits (USD Billion)

Dollarization Rate (Deposits) Loans/Deposits Ratio

Public Finance YOY

(USD Million) October 2008 October 2009 % Change

Revenues 5,879 7,111 20.97%

Expenditures (including debt servicing) 7,958 9,524 19.68%

Debt Servicing 2,971 3,317 11.63%

Total Deficit (2,011) (2,413) 19.95%

Deficit / Total Expenditures 25.28% 25.33%

Source: The Lebanese Ministry of Finance

For the Ten-Month Period Ending


7/21

THE YEAR2009 INREVIEW (CTD.)

Weekly Market Watch


3

On the capital account side of the balance of payment, the Lebanese government managed to secure some$5.697 billion from International Donors through September 30, 2009 out of $7.53 billion in total Paris IIIpledges. Of the total $5.697 billion, $2.134 billion is in the form of Budgetary Support, $1.536 billion isgeared to provide support to the Private Sector, $1.233 billion for Project Financing, $43 million forSupport through the Central Bank, $327 million is reserved for In-Kind contribution, $326 million forSupport through the United Nations and $99 million for Support through Civil Society Organizations(CSOs).

Furthermore, the Lebanese government managed to complete in March 2009 the exchange of four

USD-denominated Eurobond tranches for a total consideration of $2.037 billion and one Euro-denominatedtranche worth 225 million which was met by a resounding success with a participation rate of 82.8%, oneof the highest in history. Accordingly, an aggregate amount of around $1.655 billion and 211.097 millionof face value of notes were exchanged into new longer-dated notes maturing in 2012 and 2017. Thegovernment succeeded later in November 2009 to close the issuance of $500 million worth of new ROLEurobonds allocated over 2 tranches, a five-year tranche maturing in 2015 bearing a coupon of 5.875%which was six times oversubscribed according to the Finance Minister, and a fifteen-year tranche maturingin 2024 with an annual coupon of 7%.

On the current account side of the balance of payment, Lebanons Higher Customs Council conveyed a $33million annual contraction in Lebanons balance of trade deficit to $11,740 million as at the end ofNovember 2009. Total exports fell by 3.31% to $3,121 million, accompanied by a 0.93% drop in imports to$14,861 million.

Interest rates pursued their downward trend in 2009 on the back of the increased confidence in theLebanese economy and the accompanying set of Central Bank circulars that encourage LBP lending, giventhe lower reserve requirements on LBP credit facilities by 60%, consenting as such commercial banks toexploit the recent dip in deposit dollarization rate.

Finally inflation remained tamed during the year 2009, with Lebanons Central Administration of Statisticsconveying a shy 1.66% annual rise in Lebanons consumer price index (CPI), which is an indicative

measure of inflation, to 125.70 in October 2009, up from 123.65 a year earlier.

LBP USD LBP USD LBP USD

6.86% 3.18% 6.94% 3.16% 7.28% 3.54%

7.16% 3.60% 7.26% 3.59% 7.64% 3.98%

9.32% 7.28% 9.22% 7.24% 9.90% 7.53%

Source: Banque Du Liban

In October 2009 In September 2009 In October 2008

Discount & Loans Rate

Average Rate on Deposits

Term Savings & Deposits Rate

Interest Rate Levels


8/21

ECONOMIC INSIGHTS

LEBANON RANKS FIRST IN THE MIDDLE EAST IN TERMS OF INTERNET EXPERTS

According to the Internet Usage in the Middle East report published by Bayt.com, one of the leading jobsites in the Middle East region, Lebanon ranked first in the Middle East in terms of internet capabilities with40% of Lebanese considered as internet experts, 43% as knowledgeable but require help sometimes,16% as intermediate and only 1% classified as beginners. Concurrently, Bahrain came in the secondplace with 36% of Bahrainis considered as internet experts, followed by the UAE with 31% of itspopulation categorized as internet experts. It is worth noting that the report highlighted that the majorityof the Lebanese community is not comfortable making online payments with 36% of Lebanese not

comfortable making online payments for personal matters and 31% being not comfortable making onlinepayments for business matters. In terms of Online Education, Lebanon occupied the 13th position among14 countries in the Middle East region with 59% of surveyed Lebanese willing to consider takingonline/completing an online degree in the future. Oman, on the other hand, topped the list with 75% ofthe surveyed population expressing a positive inclination towards online education.

Weekly Market Watch

SOURCE:BAYT.COM 4

1%

16%

43 %

40 %

5%

30%

55%

11%

7%

18%

39 %

36 %

3%

25 %

51%

20 %

2%

22 %

47 %

28 %

2%

19%

50 %

29 %

5%

29 %

53 %

13%

3%

22 %

56 %

18%

4%

22 %

45 %

29 %

4%

20 %

50 %

27 %

3%

22 %

50 %

25 %

5%

24 %

45 %

26 %

2%

18%

53 %

28 %

3%

20 %

46 %

31%

3%

23%

49%

24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Lebanon Bahrain Jordan Morocco Pakistan Saudi

Arabia

Tunisia Total

Internet Capabilities in the Middle East

Beginner Intermediate knowledgeable but require help sometimes Expert

Internet Capabilties in Lebanon

Beginner

1%Intermediate

16%

knowledgeable

but require

helpsometimes

43%

Expert

40%


9/21

.

Weekly Market Watch

SOURCE:MASTERINTELLIGENCE 5

ECONOMIC INSIGHTS

LEBANONS MASTERINDEX OF CONSUMERPURCHASING RESILIENCE IN THE SECOND HALF OF 2009

Lebanons MasterIndex of consumer purchasing resilience published by MasterCard MasterIndex measures

the resilience of planned expenditures to a reduction in spending. It is worth noting that scores range

between 0 (not resilient to spending cutbacks) and 100 (most resilient to spending cutbacks). The report

revealed that in Lebanon, spending on childrens extra-curricular activities/private tuition proved the

most resilient to spending cutbacks with the index scoring 98.9, positioning Lebanon as such 1 st among 11

countries, followed by Nigeria (95.5) and Kuwait (93.3) respectively. Furthermore, Lebanon ranked 2nd

among 19 countries in terms of resilience of the expenditures on fashion and accessories with a score of

85.3, while Kuwait ranked 1st with a score of 89.6. As for the resilience of the planned expenditures on

dining and entertainment, Lebanon positioned 5th among 21 countries with a score of 79.8 as compared

to an average score of 79.5 for the Middle East and 69.3 for the World.

Resilience of Planned Expenditures to Spending Cutbacks in Lebanon

in H2 2009

85.3

79.8

98.9

0.0 20.0 40.0 60.0 80.0 100.0

Fashion &

Accessories

Dining &

Entertainment

Children's Extra-

curricular

Activities / Private

Tuition

Fashion &

Accessories

Dining &

Entertainment

Children's Extra-curricular

Activities / Private Tuition

World 68.3 69.3 88.2

Middle East 83.0 79.5 92.0

Lebanon 85.3 79.8 98.9

Asia Pacific 61.6 66.1 -

Africa 73.3 70.7 90.5

Score: From 0 (not resilient to spending cutback) to 100 (most resilient to spending cutback)Source: Masterintelligence


10/21

ECONOMIC INSIGHTS

Weekly Market Watch

SOURCE:MASTERCARD MASTERINDEXALMUSTAQBAL

6

LEBANONS MASTERINDEX OF CONSUMERPURCHASING PRIORITIES IN THE SECOND HALF OF 2009

Lebanons MasterIndex of consumer purchasing priorities published by MasterCard MasterIndex illustrates

Lebanese consumers' savings and expenditure behavior along with their discretionary spending priorities

for six months in advance. The MasterIndex pivots mainly around savings plan, savings for precautionary

purposes, saving priorities, saving barriers, purchasing priorities, spending pattern-travel related, spending

pattern-charity and spending pattern-online shopping. In terms of saving plans, 42% of surveyed

Lebanese are planning to achieve the same saving level realized 6 months earlier, 41% are planning to

save less and 18% are willing to save more. Among those who are saving more/the same as the previous 6

months, 68% of respondents prioritized their planned savings for precautionary purposes on the back of

economic uncertainty. According to the report, Lebanons top 3 saving priorities include investments

(41%), retirement (22%) and owning a car/motorcycle (15%) while top 3 saving barriers include do not

earn enough to save (67%), enjoying life as much as I can (17%) and better to invest (7%).

Furthermore, the report uncovered that purchasing priorities in Lebanon include fashion and accessories

(54%), dining and entertainment (36%) and tuition (35%). As for Lebanese top 3 travel destinations,

Turkey comes in the first place (28%) with France (23%) and Germany (21%) ranking second and third

respectively. More so, the report highlighted that 67% of surveyed Lebanese plan to make a charitable

contribution ranging between 1% to 5% of their next years annual income. Finally, the MasterIndex

indicated that 94% of Lebanese do not conduct online shopping related to holiday trips, entertainment,recreational items and luxury items.

MINISTRY OF TELECOMMUNICATIONS TRANSFERS $150MILLION TO THE TREASURY

According to a statement released earlier this week, the Ministry of Telecommunications (MOT) announcedthat it transferred some $150 million to the treasury, with total transfers aggregating to a stunning $1,265million during the year 2009, marking a considerable $23 million annual expansion.

28%

23%

21%

0%

5%

10%

15%

20%

25%

30%

Turkey France Germany

Top 3 Trav el Destinations For Lebanese in H2 2009

54%

36%35%

0%

10%

20%

30%

40%

50%

60%

Fashion &Accessories

Dining &Entertainment

Tuition

Top 3 Purchasing Priorities For Lebanese in H2 2009


11/21

ECONOMIC INSIGHTS

Weekly Market Watch

SOURCE:HIGHER CUSTOMS COUNCIL,ASSAFIR

7

BALANCE OF TRADE THROUGH NOVEMBER2009

On the current account side of the balance of payment, Lebanons Higher Customs Council conveyed a $33million annual contraction in Lebanons balance of trade deficit to $11,740 million as at the end of November2009. Total exports fell by 3.31% to $3,121 million, accompanied by a 0.93% drop in imports to $14,861million.

On a monthly basis, Lebanons balance of trade deficit widened by 28.84% to $1.24 billion in November incomparison with $0.96 billion in October. Imports rose by 22.39% in November to $1.58 billion up from$1.29 billion in October. Concurrently, exports increased by 3.98% to $0.34 billion in November, up from$0.33 billion in the month of October.

The United States led the list of exporting countries to Lebanon with total exports aggregating to $1,681

million up to November (11% of total imports), while Switzerland topped the list of importing countries for atotal consideration of $706 million (23% of total exports).

Cumulative Balance of Trade Deficit

-14,000-12,000-10,000-8,000-6,000-4,000-2,000

02,0004,0006,0008,000

10,00012,00014,00016,000

18,000

November 2008 November 2009

USD Million

Exports Imports Deficit

Switzerland $706 million 23.00%

UAE $303 million 10.00%

Iraq $254 million 8.00%

Saudi Arabia $219 million 7.00%

Syria $201 million 6.00%

Source: Higher Customs Council

Major Export Destinations

United States $1,681 million 11.00%

France $1,448 million 10.00%

China $1,305 million 9.00%

Italy $1,122 million 8.00%

Germany $1,110 million 7.00%


Major Import Sources

Balance of Trade YOY

(US$ Million) November 2008 November 2009 % Change

Exports 3,228 3,121 -3.31%

Imports 15,001 14,861 -0.93%

Trade Deficit (11,773) (11,740) -0.28%


For The Eleven-Month Period Ending


12/21

ECONOMIC INSIGHTS

Weekly Market Watch

SOURCE:UNDP 8

UNDPRELEASES REPORT ON DEVELOPMENT CHALLENGES FOR THE ARAB REGION

The United Nations Development Program (UNDP) published on December 20, 2009 a report titledDevelopment Challenges for the Arab World in which it screens the main social and economic developmentchallenges facing the Arab World from a human development perspective. Furthermore, the report spots thelight on five major development challenges facing the Arab region up to the year 2015, namely institutionalreforms and governance, creating employment opportunities, sustaining and financing a pro-poor growthprocess, reforming educational systems and economic diversification and globalization. In terms ofinstitutional reforms and governance, the report indicated that although the Arab countries recorded asignificant improvement in reforming institutions over the 1996-2006 period, said improvement wasinsignificant as compared to the worlds progress on that specific scene, thus requiring urgent action. Interms of creating employment opportunities, the report highlighted that the Arab World failed to createsignificant employment opportunities, noting that the region is characterized by a high unemployment andunderemployment (less working hours per week and irregular work) rates. As far as Lebanon is concerned,the report indicated that Lebanons unemployment rate attained 8.2% in 2005, noting that 0.21 million newjobs should be created in Lebanon through the year 2010, 0.44 million new jobs up to the year 2015 and0.68 million by 2020. As for sustaining and financing pro-poor growth which means growth that benefitsthe poor proportionately more than the non-poor, the report mentioned that poverty in the Arab countriesshould be trimmed down with Lebanons average resource gap required to reduce poverty being 3% to 5%for the distribution neutral scenario. In terms of reforming educational systems, the report emphasizedthat despite the vast expansion of education by almost all Arab countries, education continues to facemajor challenges including access to education and the quality of education. As for economicdiversification and globalization, the report stated that Arab countries should strive to diversify their

economies away from any specific economic sector, with regional and global integration considered asa must.

Country

2005 Labor Force

(million)

2005 Unemployment

Rate (%)

2005 Unemployment

(million)

2010 New Jobs

(million)

2015 New Jobs

(million)

2020 New Jobs

(million)

Egypt 22.5 10.7 20.09 2.91 6.25 9.59

Jordan 1.9 14.8 1.62 0.43 0.97 1.51

Lebanon 1.4 8.2 1.29 0.21 0.44 0.68

Syria 7.4 8.08 6.8 1.39 3.07 4.75

Bahrain 0.3 3.4 0.29 0.04 0.1 0.15

Kuwait 1.5 1.7 1.5 0.39 0.89 1.38

Oman 0.9 7.5 0.83 0.16 0.35 0.53

Qatar 0.5 2 0.49 0.04 0.09 0.14

Saudi Arabia 7.8 6.1 7.33 2.42 5.63 8.85

UAE 2.7 2.3 2.64 0.32 0.67 1.01

Total 100.3 12.97 87.29 15.03 32.98 50.91

Source: UNDP - Devlopment Challenges for the Arab Region

Projected Number of New Jobs Required

10.7

14.8

8.2 8.08

3.4

1.7

7.5

2

6.1

2.3

12.97

0

2

4

6

8

10

12

14

16

(%)

Egypt

Jordan

Lebanon

Syria

Bahrain

Kuwait

Oman

Qatar

Saudi

Arabia

UAE

Total

2005 Unemployment Rate in Arab Countries


13/21

CORPORATE NEWS

Weekly Market Watch

SOURCE:THE BEIRUT STOCK EXCHANGE,ASSAFIR

9

BANK OF BEIRUT LISTS NEW PREFERRED SHARES ON THE BSE

According to the Beirut Stock Exchange circular number 299/2009, the Beirut Stock Exchange has approvedthe listing of 2.4 million Bank of Beirut Series E Preferred shares on the official market effective as atDecember 30, 2009. The preferred shares are perpetual in nature and non-cumulative. The total issue size ofthe Series E Preferred shares is $60 million, priced at $25 per share with a share nominal value of LBP1,200 and carrying a dividend yield of 8% per annum. Pursuant to the listing of Bank of Beiruts Series EPreferred shares, the Banks total number of listed shares will aggregate to 24.27 million shares distributedas follows:

- 14.95 million common shares- 2.92 million Series C Preferred shares- 4 million Series D Preferred shares- 2.4 million Series E Preferred shares


14/21

o

e

tayy

e

o

ace

Weekly Market Watch

SOURCE:BANQUE DU LIBAN,REUTERS 10

MONETARY AGGREGATES

On the monetary front, the overall money supply M4rose by $161 million on a weekly basis to $86.02 billionnotwithstanding the $144.61 million drop in non-bankingsector Treasury bills.

On the other hand, Lebanese-pound denominateddeposits and currency in circulation M1 fell by 0.27% to$2.95 billion owing to a $37.8 million contraction inmoney in circulation outweighing the $29.85 millionincrease in demand deposits. Local currency termdeposits, M2, however, rose by 0.67% for the week and37.91% y-o-y to $33.59 billion. Consequently, privatesector term and saving deposits denominated in LBP(M2-M1) grew by $230 million to $30.65 billion whiledeposits denominated in foreign currencies (M3 M2)edged up by 0.18% to $47.79 billion, from $47.71 billionin the previous week.

MONEY MARKETS

On the money market front, the December 24th Treasurybill auction raised LBP 344.494 billion, down from LBP684.163 billion the week before. The auction resulted in asurplus of LBP 302.672 billion in comparison with asurplus of LBP 532.962 billion in the preceding week.

The bulk of the subscriptions was concentrated in thefive-year to maturity T-bills, constituting alone around69.39% of total aggregate subscriptions, followed by the

six-month and three-month to maturity securities,representing around 28.27% and 2.33% of weeklysubscriptions respectively.

MONETARYPERFORMANCE

Lebanese Treasury

Bills

Face Value(in billions of LBP)

% of Total

Face Value

Lebanese Treasury

Bills

Face Value(in billions of LBP)

% of Total

Face Value

3 Months 8.043 2.33% 12 Months 130.775 19.11%

6 Months 97.394 28.27% 24 Months 177.793 25.99%

60 Months 239.058 69.39% 36 Months 375.594 54.90%

Total 344.494 100.00% Total 684.163 100.00%

Source: Reuters, Credit Libanais Economic Research Unit

December 24 Auction December 17 Auction

Money Supply December 10, 2009 December 17, 2009 % Change

USD Million

M1 2,953 2,945 -0.27%

M2 33,370 33,592 0.67%

M3 81,077 81,382 0.38%

M4 85,860 86,021 0.19%

M3-M2 47,707 47,790 0.18%

Source: Banque Du Liban, Credit Libanais Economic Research Unit

85,860

81,077

86,021

81,382

78,000

80,000

82,000

84,000

86,000

December

10, 20 09

December

17, 20 09

Money Supply - USD Million -

M4 M3

Certificates Of Deposits 45 Days 60 Days

Interest Rate/Period 4.40% 4.89%

Lebanese Treasury Bills 3 Months 6 Months 12 Months 24 Months 36 Months 60 Months

Treasury Yield 4.55% 5.72% 5.81% 6.40% 7.20% 7.74%

On The Run Yield Curve

60 Mo nths

24 Months

12 M onths6 Months

3 Months

36 Mo nths

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

0 1 2 3 4 5 6 7


15/21

Weekly Market Watch

SOURCE:CREDIT LIBANAIS ECONOMICRESEARCH UNIT,ACTION FOREX

11

FOREIGN EXCHANGE

FOREIGN EXCHANGE

Domestically, demand for the Lebanese Pound sustained its robust momentum for another consecutiveweek, fueled by the more relaxed political environment and attractive interest rate differential over the U.S.Dollar. The inter-bank trading range hovered between LBP 1,500.5 and LBP 1,501.5 with the LebaneseCentral Bank intervening at the 1,501.0 LBP/USD level in an attempt to preserve a stable exchange rateagainst the U.S. Dollar. Demand for the Lebanese Pound continued to outweigh the supply of the domesticcurrency. This is particularly evidenced by the regressing deposit dollarization rate to 64.72% as at the endof October 2009.

On the foreign exchange front, the U.S. dollar appreciated against the Japanese yen to a three-month highlast week on the back of better than expected economic data pertaining to U.S. jobless claims. Moreparticularly, the U.S. Labor Department announced that the number of applicants filing for unemploymentbenefits fell by 22,000 to 432,000 during the week ended December 26, 2009, posting the lowest levelsince July 2008. Decembers fourth week initial jobless claims lagged behind U.S. economists expectationsof a higher 455,000 reading.

In mid Friday session, the Euro inched slightly downwards (by 0.014%) against the U.S. Dollar for the dayto $1.4323 after having hovered between $1.4319 and $1.4327. On a weekly basis, the Euro fell by 0.51%to $1.4323. The initial support level was reset at $1.4260 with the resistance level readjusted at $1.4385.

Moreover, the U.S. Dollar headed north against the Japanese Yen, gaining some 2.00% for the week to amarket close of 93.00 Yen. The Dollar traded between a range of92.95 and 93.04 against the Yen onFriday, ending the day at 93.00 Yen. The initial support level was revised and set at 90.75 Yen with theresistance level reset at 93.05 Yen.

The U.S. Dollar however fell against the Sterling Pound (GBP) by 1.29% for the week. The British Poundwas trading between $1.6144 and $1.6168 ending the week at $1.6168 in New York session. The initialsupport level was revised to $1.6005 with the resistance level readjusted to $1.6175.

Gold kg 995 Ounce Silver Kg Silver Ounce

35,247.65 1,096.35 541.41 16.84

Gold & Silver (in USD)

Period USD GBP CHF JPY CAD EUR

O/N 0.1500 0.3500 0.0100 0.0100 0.0500 0.1300

1 Month 0.1900 0.4500 0.0100 0.0200 0.1600 0.3200

3 Months 0.2300 0.5000 0.1500 0.2000 0.3800 0.6100

6 Months 0.3300 0.8300 0.3000 0.3200 0.6000 0.5800

1 Year 0.9500 0.8800 0.4000 0.3500 1.0000 1.1800

5 Years 2.6839 2.7870 1.1460 0.4700 2.7730 2.4380

10 Years 3.8368 4.0100 2.0250 1.2910 3.6110 3.3880

30 Years 4.6351 4.4120 2.3990 2.2690 4.0800 4.1080

Source: Banque du Liban, Credit Libanais Forex Department, Reuters

World Interest rates levels

Major Crosses EUR GBP CHF JPY CAD

EUR - 0.8856 1.4811 133.200 1.5063

GBP 1.1283 - 1.6719 150.360 1.7004

CHF 0.6740 0.5971 - 89.810 1.1056

JPY 0.7500 0.6645 1.1113 - 1.1303

CAD 0.6631 0.5875 0.9826 88.370 -

Major Currencies Last Previous

USD/LBP 1,507.5 1,507.5

EUR/LBP 2,160.0 2,171.4

CAD/LBP 1,436.1 1,440.9

CHF/LBP 1,451.3 1,458.1

GBP/LBP 2,389.2 2,412.0

-0.53%

% Change

0.00%

-0.33%

-0.46%

-0.94%

Major Currencies Last Previous

EUR/USD 1.4323 1.4396

GBP/USD 1.6168 1.5962

USD/JPY 93.00 91.18

USD/CHF 1.0341 1.0339

USD/CAD 1.0517 1.0462

-0.51%

% Change

1.29%

2.00%

0.02%

0.53%


16/21

LEBANESE EQUITIES

The Beirut Stock Exchange witnessed a calm tradingactivity last week amid end of year holidays with248,012 shares changing hands, in comparison with391,383 shares in the preceding week.

The Credit Libanais Aggregate Stock Index (CLASI)

ended the year 2009 on a positive note, closing upby 1.50% for the week and 3.34% on a yearly basisat 1,327.86. This owes to the gains spotted in theprices of heavy market-capitalized Audi Bank Listedshares and GDRs and BLOM Bank GDRs.

Six gainers and four three losers were screenedthroughout the week, lifting market capitalization by1.83% to $12.84 billion, from $12.61 billion a weekearlier. Value traded, however, plunged by 49.72%to $6.43 million, down from $12.80 million a weekago.

On the real estate and construction front, the prices

of Solidere A & B shares fell by 0.12% and 0.46%respectively. Consequently, the Credit LibanaisConstruction Sector Stock Index (CLCI) weighed infavor of the losing real estate stocks, closing downat 1,168.41.

In the Banking sector, Byblos Bank priority sharesled the weekly trades with 104,320 shares traded.The Credit Libanais Financial Sector Stock Indexrose to its year high of 1,407.74.

On the international scene, the Solidere GDR wasthe sharpest gainer of the week, closing up by3.16% at $24.50.

Weekly Market Watch

SOURCE:CREDIT LIBANAIS ECONOMIC

RESEARCH UNIT

12

LEBANESE EQUITIES&GDRS

.CLASI Credit L ibanais Aggregate Stock Index

Value Daily % Chng Daily Net Chng

1,327.86 1.244% 16.32

Yr.High Year Hi.Date Yr.Low Year.Lo.Date

1,368.79 9-Nov-09 836.11 25-Mar-09

Life High Life Hi.Date Life Low Life.Lo.Date

1,801.01 7-J ul-08 836.11 25-Mar-09

Wednesday, December 30, 2009

Credit Libanais Aggregate Stock Index

Weekly Performance

CLASI

0200

400

600

800

1,000

1,200

1,400

1,600

01-J an-

09

03-Feb-09

08-Mar-09

10-Apr-09

13-May-09

15-J un-

09

18-J ul-09

20-Aug-09

22-Sep-09

25-Oct-09

27-Nov-09

30-Dec-09

IndexValue

CLASI 1.50%

Credit Libanais Financial Sector Stock Index

Weekly Performance

CLFI

0

200

400

600

800

1,000

1,200

1,400

1,600

01-J an-

09

03-Feb-09

08-Mar-09

10-Apr-09

13-May-09

15-J un-

09

18-J ul-09

20-Aug-09

22-Sep-09

25-Oct-09

27-Nov-09

30-Dec-09

IndexValue

CLFI 2.40%

Credit Libanais Construction Sector Stock Index

Weekly Performance

CLCI

0

200

400

600

800

1,000

1,200

1,400

1,600

01-J an-

09

03-Feb-09

08-Mar-09

10-Apr-09

13-May-09

15-J un-

09

18-J ul-09

20-Aug-09

22-Sep-09

25-Oct-09

27-Nov-09

30-Dec-09

IndexV

alue

CLCI 0.05%

Credit Libanais Closing Previous Weekly

Indices 30-Dec-09 25-Dec-09 % Chang

Credit Libanais Aggregate Stock Index

1,327.86 1,308.28 1.50%

Credit Libanais Financial Sector Stock

Index 1,407.74 1,374.79 2.40%

Credit Libanais Construction Sector

Stock Index

1,168.41 1,168.95 -0.05%

Source: Credit Libanais Economic Research Unit


17/21

Heavy market capitalization-weightedBLOM Bank GDRs emerged as thelargest contributors (34.47%) to theweeks traded value with a turnoverratio of 0.34%. Other active stocks

included Solidere A and B listedshares accounting for 31.94% of totalweekly traded value respectively.

Weekly Market Watch


13

The weighted average P/E and P/Bv ratios of the Beirut Bourse rose to 13.94 and 1.69 respectively incomparison with 13.81 and 1.67 during the preceding week. This owes particularly to the capital gains inthe prices of banking stocks.

LEBANESE EQUITIES&GDRS (CTD.)

13.936

1.690

13.810

1.667

0

5

10

15

January 1, 2010 December 25, 2009

Evolution of Beirut Bourse Comparable Benchmarks

P/E P/BV

Closing Weekly Total Market P/E P/BV YTD Price

%change Volume Outstanding Capitalisation Perf.

Traded Shares ($000)

Solidere A $23.98 -0.12% 70,525 100,000,000 $2,398,000.00 21.65 2.13 45.0%

Solidere B $23.78 -0.46% 15,856 65,000,000 $1,545,700.00 21.47 2.11 42.4%

BLC "C" Bank $1.60 0.00% - 50,900,000 $81,440.00 4.57 0.76 -15.8%

Banque Audi Listed Shares $82.95 6.14% 11,640 34,418,941 $2,855,051.16 11.07 1.54 59.52%

Banque Audi GDR $89.00 3.49% 10,240 9,829,902 $874,861.28 11.88 1.65 66.5%

Bank Audi Preferred "D" $103.00 0.00% - 1,250,000 $128,750.00 n.a n.a n.a

Bank Of Beirut "C" $18.75 1.35% 2,000 14,949,792 $280,308.60 27.17 2.73 2.74%

Bank Of Beirut Preferred "C" $26.90 0.00% - 2,920,000 $78,548.00 n.a n.a 5.49%

Bank Of Beirut Preferred "D" $27.15 0.00% - 4,000,000 $108,600.00 n.a n.a n.a

Bank Of Beirut Preferred "E" $25.00 0.00% - 2,400,000 $60,000.00 n.a n.a 0.00%

Byblos Bank "C" $2.09 -0.48% 7,704 217,112,557 $453,765.24 7.46 1.12 30.63%

Byblos Bank Priority $2.10 -2.33% 104,320 206,023,723 $432,649.82 7.50 1.1 28.05%

Byblos Bank Preferred Class 2008 $104.00 0.00% - 2,000,000 $208,000.00 n.a n.a 4.00%

Byblos Bank Preferred Class 2009 $100.10 0.00% - 2,000,000 $200,200.00 n.a n.a 0.10%

Byblos Bank GDR $105.00 0.00% - 1,033,042 $108,469.41 7.50 1.1 31.25%

BEMO Bank-Listed shares $4.90 0.00% - 5,400,000 $26,460.00 9.80 1.34 1.45%

BEMO Bank Preferred $100.00 0.00% - 200,000 $20,000.00 n.a n.a 0.00%

BLOM Bank GDR $89.80 2.63% 24,941 7,389,601 $663,586.17 7.41 1.44 23.27%

BLOM Bank Listed Shares $84.00 0.00% - 21,500,000 $1,806,000.00 6.93 1.35 12.37%

BLOM Bank Preferred "2004" $101.30 0.00% - 750,000 $75,975.00 n.a n.a 0.30%

BLOM Bank Preferred "2005" $101.70 0.20% 416 1,000,000 $101,700.00 n.a n.a 0.00%

RYMCO $3.15 0.00% - 10,400,000 $32,760.00 39.38 2.15 50.00%

Holcim Liban $12.52 3.47% 370 19,516,040 $244,340.82 12.5 1.23 -21.41%Ciment Blancs Bearer $3.15 0.00% - 6,000,000 $18,900.00 8.75 1.82 50.72%

Ciment Blancs Nominal $0.50 0.00% - 3,000,000 $1,500.00 1.39 0.29 -73.68%

Beirut Preferred Fund $109.10 0.00% - 325,756 $35,539.98 n.a n.a n.a

Solidere $24.50 3.16% 9,091,750 $222,747.88 18.03 2.21 14.593%

Audi $87.00 1.05% 9,687,532 $842,815.28 11.80 1.71 15.846%

BLOM Bank GDR $88.00 1.27% 7,389,601 $650,284.89 7.71 1.60 -2.277%

Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit

GLOBAL DEPOSITORY RECEIPTS

BEIRUT STOCK EXCHANGE

Lebanese Equities

Last Previous % Change

Value Traded $6,434,433.00 $12,797,229.00 -49.72%

Volume Traded 248,012 391,383 -36.63%

Market Cap - BSE $12,842,743,477 $12,611,376,215 1.83%

Market Cap - Intl $1,715,848.05 $1,692,181.89 1.40%

Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit

Act ivi ty Analysi s


18/21

Weekly Market Watch

SOURCE:BDL, ABL , IMF, BILANBANQUES,CREDIT LIBANAIS RESEARCH UNIT

14

LEBANONS MAININDICATORS

2003 2004 2005 2006 2007 2008 2009

MACROECONOMIC INDICATORS

GDP ($ Million) 19,795 21,465 21,861 22,438 25,047 28,942 31,298*

Real GDP Growth Rate 4.14% 7.45% 1.10% 0.60% 7.50% 8.50% 7.00%*

GDP Per Capita ($) 5,559 5,949 5,988 6,059.88* 6,677* 7,616.62* 8,131.6*

Net Foreign Direct Investment ($ Million) 2,997 1,993 2,624 2,675 2,731 3,606 N.A

FDI/GDP Ratio 15.14% 9.28% 12.00% 11.92% 10.90% 12.46% N.A

INDUSTRY

Industrial Exports ($ Million) 1,087 1,467 1,667 1,738 2,361 2,994 2,173(4)

Industrial Exports/Total Exports Ratio 71.33% 83.97% 88.67% 76.13% 83.84% 86.08% 78.14%

Import of Industrial Machinery ($ Million) 109 142 137 130 163 188 167.60(4)

Import of Industrial Machinery/Total Imports Ratio 1.52% 1.51% 1.47% 1.38% 1.38% 1.17% 1.26%

TOURISM

Arab Tourists Arrivals 438,203 545,150 451,430 456,889 400,082 549,463 731,141(5)

U.S. Tourists Arrivals 120,429 152,075 136,907 129,274 121,596 176,647 214,480(5)

Asia Tourists Arrivals 134,164 173,897 177,809 164,053 137,832 181,006 246,446(5)

Europe Tourists Arrivals 266,691 338,475 316,083 267,142 277,337 347,495 415,471(5)

Others Tourists Arrivals 89,153 68,872 57,295 33,659 32,154 43,796 105,802(5)

Total Number of Tourists 1,015,793 1,278,469 1,139,524 1,062,635 1,017,072 1,332,551 1,713,340

Growth in Tax-Free Spending N.A N.A 2% -15% 17% 56% 13% (5)

REAL ESTATE

Value of Real Estate Transactions ($ Million) 2,882.5 2,882.9 3,295.8 3,120.4 4,175.0 6,443.7 2,456.5(2)

Number of Real Estate Sales Transactions 48,657 52,700 51,564 51,027 67,689 85,025 33,830(2)

Construction Permits (000 sqm) 7,196 7,719 7,928 7,532 7,919 14,281 8,333(4)

Cement Delivery (000 tons) 2,704 2,729 3,040 3,423 3,945 4,219 3,674(3)

TRANSPORTATION

Beirut Port Activity

Freight Activity(000 Tons) 4,767 5,060 4,476 4,226 5,318 5,746 5,769(6)

Number of Vessels 2,333 2,366 2,229 1,829 2,187 2,055 2,199(6)

Number of Containers 115,034 137,492 464,976 594,601 947,265 861,931 912,434(6)

Beirut Airport Activity

Number of Passengers (million) 2,718,000 3,200,000 3,177,000 2,739,606 3,408,834 3,869,607 4.17 (4)

FOREIGN TRADE

Imports ($ Million) 7,168 9,397 9,340 9,398 11,815 16,137 14,861(5)

Exports ($ Million) 1,524 1,747 1,880 2,283 2,816 3,478 3,121(5)

Trade Balance ($ Million) (5,644) (7,650) (7,460) (7,115) (8,999) (12,658) (11,740)(5)

Exports/Imports 21.26% 18.59% 20.13% 24.29% 23.83% 21.55% 21.00%

BALANCE OF PAYMENTS

BOP at BDL and Banks & Financial Inst ($ Mi ll ion) 3,385 168 747 2,792 2,037 3,460.60 6,009.2(4)

Foreign Assets ($ Billion) 12.18 11.48 11.66 12.97 12.39 19.73 27.21(6)

Foreign Currency Reserves ($ Billion) 10.20 9.49 9.85 10.21 9.78 17.062 23.21(4)

PUBLIC FINANCE

Government Expenditures ($ Million) 7,027 6,992 6,768 7,880 8,350 9,922 9,524(4)

Government Revenues ($ Million) 4,415 4,984 4,912 4,853 5,804 7,000 7,111(4)

Budget Deficit / Surplus ($ Million) (1,719) (817) (543) (1,688) (1,311) (789) (354.72)(4)

Budget Primary Deficit / Surplus ($ Million) 1,515 1,851 1,802 1,335 1,787 2,730 904.41(4)

Total Deficit ($ Million) (2,612) (2,008) (1,856) (3,027) (2,546) (2,921) (2,413)(4)

Deficit / Total Expenditures Ratio 37.17% 28.71% 27.42% 38.42% 30.49% 29.45% 25.34%

Deficit / GDP Ratio 13.20% 9.35% 8.61% 13.49% 10.16% 10.10% N.A

Debt Service / GDP Ratio 16.33% 12.43% 10.88% 13.47% 13.08% 12.16% N.A

EDL Support / GDP Ratio - - - 4.05% 3.92% 5.57% N.A

External Debt ($ Billion) 15.56 18.38 19.13 20.33 21.21 21.15 21.18 (4)

Net Domestic Debt ($ Billion) 15.80 14.60 15.62 17.09 17.81 20.35 22.56(4)

Net Public Debt ($ Billion) 31.36 32.98 34.76 37.42 39.02 41.50 43.74(4)

Gross Public Debt/GDP Ratio 168.50% 167.00% 175.70% 179.90% 167.80% 162.50% N.A

MONETARY AGGREGATES & INFLATION

M1 ($ Billion) 1.89 2.01 1.96 2.20 2.36 2.83 2.95(6)

M2 ($ Billion) 17.40 17.23 16.23 15.57 16.47 24.76 33.59(6)

M3 ($ Billion) 42.91 47.30 49.38 53.23 59.83 68.66 81.38(6)

M4 ($ Billion) 46.63 49.63 51.59 56.08 63.56 72.58 86.02(6)

(M2-M1) ($ Billion) 15.51 15.22 14.27 13.37 14.11 21.93 30.65(6)

Monetization Level (M2/GDP Ratio) 87.90% 80.27% 74.24% 69.39% 65.76% 85.55% N.A

Consumer Price Index 136.75 102.48 99.63 107.24 113.59 120.81 125.70(4)

change in CPI (%) 3.00% 1.70% -2.60% 5.60% 9.30% 6.36%

BANKING SYSTEM

Number of Commercial Banks 52 53 54 54 54 56 56(1)

Number of Branches 809 802 926 977 847 860 862(1)

Number of Employees 15,714 16,281 17,480 18,945 --- ---

Total Assets ($ Million) 59,895 67,786 70,325 76,179 82,255 94,255 111,569(4)

Total Deposits ($ Million) 49,362 55,835 58,117 61,541 68,059 78,663 93,404(4)

Deposits of the Private Sector ($ Million) 48,483 54,853 56,986 60,494 67,288 77,780 92,442(4)

Deposits of the Public Sector ($ Million) 879 982 1,131 1,047 771 883 961

(4)

Loans to the Private Sector ($ Million) 14,929 15,934 16,230 17,201 17,753 21,062 23,609(4)

Claims on the Public Sector ($ Million) 21,006 24,156 26,696 31,192 32,424 38,314 28,164(4)

Total Shareholders Equity ($ Million) 4,530 4,941 6,172 7,688 8,555 9,858

Customer Loans/ Deposits 30.24% 28.54% 27.93% 27.95% 26.08% 26.78% 25.28%

Customer Loans/Total Assets 24.93% 23.51% 23.08% 22.58% 21.58% 22.35% 21.16%

Dollarization Rate 65.02% 68.78% 71.71% 75.16% 76.46% 68.79% 64.72%

Net Interest Income ($Million) 1,074.78 1,088.39 1,203.61 1,544.31 1,845.44 2,361.98 N.A

Net Fees and Commissions Income ($Million) 260.24 302.82 354.38 401.24 488.85 595.89 N.A

Net Profit - After Tax ($ Million) 448.30 463.42 580.47 753.51 961.99 1,218.85 N.A

ROE 11.14% 10.22% 10.71% 10.98% 11.79% 13.20% N.A

ROA 0.75% 0.68% 0.77% 0.91% 1.02% 1.13% N.A

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

* Figures Reflect IMF Estimates

(1) As At End of March 2009 - (2) As At End of June 2009 - (3) As At End of September 2009, (4) As At End of October 2009, (5) As At End of November 2009

(6) As At December 17, 2009

Recap of Lebanon's Major Indicators


19/21

Rated Banks

Long Term Foreign

Currency

Financial

StrengthOutlook

Long Term Foreign

CurrencyOutlook

Bank Audi-Saradar B2 D- Positive B Stable

BLOM Bank B2 D- Positive B Stable

Credit Libanais - - - B Stable

Byblos Bank B2 D- Positive B Stable

BBAC - - - B Stable

Fransabank - - - B Stable

Bank of Beirut B2 D- Positive - -

Sources: Moody's Investors Service, Capital Intellgince

Lebanese Banks' Latest Ratings

Capital IntelligenceMoody's Investors

Service

LEBANONS RATINGS

Weekly Market Watch

MOF, MOODYS, CAPITALINTELLIGENCE, CREDIT LIBANAISECONOMIC RESEARCH UNIT

15

Rating Agency Tenor Rating

Standard & Poor's Long-term B

short-term B

Moody's Investors Service Ltd Long-term B2

Fitch IBCA Ltd Long-term B-short-term B

Source: Ministry of Finance: Debt & Debt Markets Reports Q2, 2009, Moody's Investors Service, Standard and Poor's

Positive

Stable

Stable

Republic Of Lebanon Sovereign Ratings

Outlook


20/21

JOBLESS CLAIMS IN THE FOURTH WEEK OF DECEMBER2009

The U.S. Labor Department announced a contraction in initial jobless claims during the week endedDecember 26, 2009. Week-on-week, the number of applicants filing for unemployment benefits fell by22,000 to 432,000, posting the lowest level since July 2008. Concurrently, the four-week average of initialclaims narrowed by 5,500 to 460,250. Decembers fourth week initial jobless claims lagged behind U.S.economists expectations of a higher 455,000 reading.

CONSUMERCONFIDENCE INDEX IN DECEMBER2009

The U.S. Conference Board conveyed that the U.S. consumer confidence index rose for the second

consecutive month by 4.55% to 52.9 in December 2009, up from 50.6 in November 2009. Decembersconsumer confidence lagged behind U.S. economists expectations of a higher 54.0 reading.

HOME PRICE INDEX IN OCTOBER2009

Standard & Poor's Case-Shiller Index remained flat in October 2009 with home prices increasing in 7 U.S.cities out of 20. On a yearly basis however, housing prices in all 20 U.S. cities dwindled in October 2009 ascompared to October 2008.

U.S.TREASURY

The U.S. 10-year Treasury note yield rose to 3.84% on Friday January 1, up from 3.81% in the precedingweek, posting the sharpest annual increase in 10 years. This is mainly attributed to the back of betterthan expected economic data pertaining to U.S. jobless claims.

U.S.MARKET INDICESOn the capital markets front, the Dow Jones Industrial Average fell by 0.87% for the week to a marketclose of 10,428.05. Moreover, the NASDAQ Composite Index ended the week down by 0.72% at 2,269.15,while the S&P500 index headed south by 1.01% to close at 1,115.10.

Weekly Market Watch

SOURCE:CBS MARKET WATCH,REUTERS 16

U.S.MARKETS

U.S. Market Indices

Closing Lev els

Dow Jone s Indus tr ia l A ve rage 10,520.10 10,4 28.05 -0.87%

Nasdaq Composite Index 2,285.69 2,269.15 -0.72%

Standard & Poor 500 Index 1,126.48 1,115.10 -1.01%

10-Year U.S. T-Bond 3.81% 3.84%

25-Dec-09 1-Jan-10 % Change

U.S. Tr eas ur y Bills 1M 3M 6M 2Yr 5Yr 10Yr 30Yr

Yield (%) 0.04 0.06 0.20 1.14 2.68 3.84 4.64

Dow Jones Industrial Average

0

2,000

4,000

6,000

8,000

10,000

12,000

1-J an-

09

1-M ar-

09

1-M ay-

09

1- Jul -09 1-Sep -

09

1-No v-

09

1-J an-

10

Dow Jones 0.87%

DOW J ONES INDUSTRIAL AVERAGE

On The Run Yield Curve

3Yr

5Yr

7Yr

10Yr

30Yr

2Yr

1M 3M 6M1Yr

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

0 2 4 6 8 10


21/21

CONTACTS

RESEARCH Fadlo I. Choueiri, CFA [email protected] 961-1-200028 EXT:235

Jad Abi Haidar [email protected] 961-1-200028 EXT.251Rim Fayad [email protected] 961-1-200028 EXT.230

MONEY MARKETS DESK Robert Araman [email protected] 961-1-200028 EXT.116FXDESK Christian Hajjar [email protected] 961-1-200027CAPITAL MARKETS DESK Ghaith Mansour [email protected] 961-1-322191

This document is being furnished to you solely for your information and may not be reproduced orredistributed to any other person. This document does not constitute an offer or invitation to subscribe toor purchase any security, and neither this document nor anything contained herein shall form the basis ofany 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

CONTACTS

full weekly market watch 201002

Documents