lebanon weekly monitor...lebanon’s external sector witnessed a considerable drop in trade deficit...

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Bank Audi sal - Group Research Department - Bank Audi Plaza - Bab Idriss - PO Box 11-2560 - Lebanon - Tel: 961 1 994 000 - email: [email protected]

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LEBANON MARKETS: WEEK OF DECEMBER 21 - DECEMBER 27, 2020

Marwan Barakat(961-1) [email protected]

Jamil Naayem(961-1) [email protected]

Salma Saad Baba(961-1) [email protected]

Fadi Kanso(961-1) [email protected]

Farah Nahlawi(961-1) [email protected]

Economy____________________________________________________________________________p.2 TRADE DEFICIT CONTRACTING BY 58% AMID A 49% DECLINE IN IMPORTS IN FIRST NINE MONTHSOF 2020Lebanon’s external sector witnessed a considerable drop in trade deficit by 58.0% over the first nine months of 2020, when compared to the first nine months of 2019, moving from US$ 12.5 billion to US$ 5.2 billion between the two periods, according to trade statistics released by Lebanon’s Customs Authority.

Also in this issuep.3 Value of property sales up by 114% in first eleven months of 2020p.3 Number of returned cleared checks declining by 64% in first eleven months of 2020p.4 Number of outstanding bank payment cards contracting by 6% in first ten months of 2020

Surveys____________________________________________________________________________p.5 LEBANON RECORDS AN OVERALL SCORE OF 71 IN SUSTAINABLE ENERGY INDICATORS,AS PER THE WORLD BANK’S RISE 2020The World Bank published its third edition of Regulatory Indicators for Sustainable Energy (RISE) in which Lebanon reported an overall score of 71.

Also in this issuep.5 Lebanese economy to contract by 25.0% in 2020, as per Bloomberg surveyp.6 Lebanon’s weak logistics profile largely stems from poor infrastructure, as per Fitch Solutions

Corporate News____________________________________________________________________________p.7 BANKERS TOPS LEBANESE INSURANCE COMPANIES IN GROSS WRITTEN PREMIUMS INFIRST THREE QUARTERS OF 2020, AS PER ICCAccording to the quarterly statistics report released by the Insurance Control Commission (ICC), gross written premiums stood at LP 1,787,073 million in the first three quarters of 2020, compared to LP 1,898,418 million in the same period of the previous year.

Also in this issuep.7 International contributions to LCRP at US$ 1 billion in first nine months of 2020p.8 Apave-Liban introduces “Safe and Clean” label to certify businesses with measures against COVID

Markets In Brief____________________________________________________________________________p.9 MARKETS IN BRIEF: BOND PRICES AT LOW-TEENS AS CABINET FORMATION PROCESSHITS DEAD-ENDAfter failing to make a breakthrough in a monthslong cabinet deadlock and as subsidy rationalization is looming, Lebanon’s capital markets saw this week some fluctuations in the LP/US$ exchange rate and stability in prices on the bond market, while the equity market registered extended price gains amid low trading volumes. In details, the Lebanese pound saw some fluctuations against the US dollar over this short week, mainly on mixed cabinet news. After falling below the LP/US$ 8,000 level mid-week on bets over a cabinet breakthrough, the LP/US$ rate deteriorated to LP/US$ 8,350-LP/US$ 8,400 on Thursday after the cabinet formation process hit a dead-end. On the Eurobond market, prices of sovereigns continued to hover between 13.0 cents per US dollar and 14.13 cents per US dollar, on lingering cabinet concerns and prospects of delayed negotiations with bondholders. Finally, the equity market extended its upward trajectory for the third consecutive week, while the BSE total turnover contracted by 5% week-on-week.

Money Market ⬌LP Tbs Market ⬆LP Exchange Market ⬌

BSE Equity Market ⬆Eurobond Market ⬌CDS Market -

DECEMBER 21 - DECEMBER 27, 2020WEEK 52

LEBANONWEEKLY

MONITOR

Week 52 December 21 - December 27, 2020 1

Week 52 December 21 - December 27, 2020

DECEMBER 21 - DECEMBER 27, 2020 WEEK 52

2

ECONOMY______________________________________________________________________________TRADE DEFICIT CONTRACTING BY 58% AMID A 49% DECLINE IN IMPORTS IN FIRST NINE MONTHS OF 2020

Lebanon’s external sector witnessed a considerable drop in trade deficit by 58.0% over the first nine months of 2020, when compared to the first nine months of 2019, moving from US$ 12.5 billion to US$ 5.2 billion between the two periods, according to trade statistics released by Lebanon’s Customs Authority.

In fact, the tangible contraction in trade deficit was triggered by a net decline in imports by 48.5%, mainly tied to the tough economic and financial conditions, and amid a decrease in exports by 6.3%, in the aftermath of the Covid-19 Pandemic crisis. Accordingly, the sum of exports and imports went down by 42.0% to reach US$ 10.5 billion over the first nine months of 2020, while the exports to imports ratio almost doubled, moving from 18.3% to 33.4% between the two periods.

In details, the breakdown of exports by product suggests that the most significant decline among the major categories was reported by paper and paper products with 41.1%, plastic products with 37.7%, followed by chemical products with 18.3%, electrical equipments and products with 16.2% and metals and metal products with 6.1% over the first nine months of 2020 when compared to the first nine months of 2019. On the other hand, the main items to have displayed an increase were live animal and animal products with 50.0%, vegetable products with 49.2% and food products with 1.1% over the same period.

The breakdown of exports by major countries of destination suggests that exports to Syria reported the most significant decline of 50.0% year-on-year, followed by UAE with 16.7%, Jordan with 16.4%, Iraq with 14.8% and Saudi Arabia with 12.8% between the two periods, while exports to Turkey reported a significant increase of 42.2%, followed by Kuwait with 32.0% over the same period. It is worth mentioning that land exports through Syria continued its negative trend to decrease by 36.6%, moving from US$ 224 million to US$ 142 million. In parallel, exports through the Hariri International Airport went down by 5.7%, while those through the Port of Beirut witnessed a relative increase by 2.3% over the same period.

In parallel, the breakdown of imports by product suggests that the most significant decline was reported by transport vehicles with 67.6%, followed by textiles and textile products with 64.8%, metals and metal products with 63.8%, electrical equipments and products with 61.4%, plastic products with 55.4% and mineral products with 54.6% over the first nine months of 2020 relative to 2019 same period. The breakdown of imports by country of origin over the same period shows that, among the major partners, imports from Kuwait dropped the most by 72.3%, followed by Russia with 62.4%, China with 61.7%, Spain with 59.6%, USA with 56.8%, France with 56.7%, Italy with 48.2% and Greece with 39.9% between the two periods.

Sources: Lebanon's Customs Administration, Bank Audi's Group Research Department

2,228 2,114 2,1992,808 2,632

14,536 14,45715,156 15,305

7,878

12,308 12,343 12,957 12,497

5,246

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

9M-16 9M-17 9M-18 9M-19 9M-20

Exports (US$ million) Imports (US$ million) Trade de�cit (US$ million)

LEBANON'S FOREIGN TRADE ACTIVITY

3Week 52 December 21 - December 27, 2020


____________________________________________________________________________ VALUE OF PROPERTY SALES UP BY 114% IN FIRST ELEVEN MONTHS OF 2020

As per the latest statistics published by the General Directorate of Land Registry and Cadastre, the value of property sales transactions posted a considerable increase of 113.8% year-on-year to reach a total of US$ 12,269 million during the same period of 2020. Accordingly, the average sales value increased from US$ 129,949 in the first eleven months of 2019 to US$ 178,296 in the first eleven months of 2020.

As for the breakdown of the value of property sales, Beirut continued to capture the highest share over the period with a share of 34.1%, followed by Baabda with a share of 17.1%, Metn with 17.0%, Keserwan with 11.7%, South with 11.2%, North with 5.1% and Bekaa with 3.0%.

It is worth mentioning that most of the regions recorded an increase in the value of sales transactions, with the most significant movements coming as follows: Kesrouan (+163%), Beirut (+126%) and Metn (+102%). On another hand, property taxes recorded a hike of 120.5% to reach US$ 564.2 million over the period.

In parallel, the number of sales operations went up from 44,163 operations in the first eleven months of 2019 to 68,811 operations in the first eleven months of 2020, while sales to foreigners increased by 12.9% year-on-year to reach 1,016 operations over the same period.

_____________________________________________________________________________NUMBER OF RETURNED CLEARED CHECKS DECLINING BY 64% IN FIRST ELEVEN MONTHS OF 2020

The number of returned checks registered 105,113 over the first eleven months of 2020, down by 64.3% from 294,362 over the first eleven months of 2019, while the value of returned checks went down by 38.2%, moving from US$ 1,457 million to US$ 900 million between the two periods, as per the Central Bank of Lebanon.

As such, the number of returned checks to total number of cleared checks went down slightly from 3.2% over the first eleven months of 2019 to 2.0% over the first eleven months of 2020, while the value of returned checks to total value of cleared checks went down from 2.9% to 1.8% between the two periods.

Sources: General Directorate of Land Registry and Cadastre, Bank Audi's Group Research Department

Beirut 34.1%

Baabda17.1%Metn

17.0%

Keserwan11.7%

South 11.2%

North 5.1%

Bekaa3.0% Others

0.8%

11M-20

Beirut 32.3%

Baabda18.2%Metn

18.1%

Keserwan9.5%

South 11.5%

North 6.1%

Bekaa3.5%

Others0.8%

11M-19

BREAKDOWN OF THE VALUE OF PROPERTY SALES BY REGION



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__________________________________________________________________________NUMBER OF OUTSTANDING BANK PAYMENT CARDS CONTRACTING BY 6% IN FIRST TEN MONTHS OF 2020

The total number of outstanding bank payment cards reached 2,863,971 cards at end-October 2020, down from 3,036,756 cards at end-December 2019, a drop of 172,785 cards (or -5.7%) over the first ten months of this year, as per the latest statistics published by the Central Bank of Lebanon.

This contraction in bank payment cards was the result of a significant drop in the total number of credit cards by 157,002 cards over the period and a net contraction in total number of prepaid cards by 34,274 cards, against a continued increase in debit cards by 36,956 cards over the first ten months of the year to reach 1,888,809 cards as at end-October.

1,530 1,462 1,4301,623 1,637

1,457

900

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2015 2016 2017 2018 2019 11M-19 11M-20

(US$ million)

-38.2%

VALUE OF RETURNED CHECKS

Sources: BDL, Bank Audi's Group Research Department

Sources: BDL, Bank Audi's Group Research Department

Debit cards66.0%

Credit cards13.9%

Prepaid cards17.0%

Charge cards3.1%

Oct-20

Debit cards61.1%

Credit cards18.3%

Prepaid cards17.1%

Charge cards3.5%

Dec-19

BREAKDOWN OF THE NUMBER OF BANK PAYMENT CARDS BY TYPE



SURVEYS_____________________________________________________________________________LEBANON RECORDS AN OVERALL SCORE OF 71 IN SUSTAINABLE ENERGY INDICATORS, AS PER THE WORLD BANK’S RISE 2020

The World Bank published its third edition of Regulatory Indicators for Sustainable Energy (RISE) in which Lebanon reported an overall score of 71. Lebanon ranked ninth on energy efficiency and sixth in renewable energy. The country scored 47 on energy efficiency and 67 on renewable energy. Lebanon scored 100 on electricity access.

This report is a global policy report in which it assesses the national policy and regulatory frameworks for sustainable energy.

RISE is a set of indicators intended for use in comparing the policy and regulatory frameworks that countries have put in place to support the achievement of Sustainable Development Goal 7 on universal access to clean and modern energy. The data in RISE 2020 cover the years 2010 to 2019 and are current as of December 31, 2019.

The third edition of the report captures policies and regulations that enhance sustainable energy in the form of 31 indicators distributed among four pillars: access to electricity, clean cooking, renewable energy, and energy efficiency.

The indicators, scored on a 0–100 scale, can be used to compare 138 economies.

_____________________________________________________________________________LEBANESE ECONOMY TO CONTRACT BY 25.0% IN 2020, AS PER BLOOMBERG SURVEY

According to a recent survey conducted by Bloomberg, the Lebanese economy is expected to be in contraction mode with negative growth at -25.0% in 2020, and 1.0% and 2.0% in 2021 and 2022 respectively.

It is worth noting that the survey was completed by nine economists.

ARAB MENA REGION'S RISE 2019 SCORES

Sources: RISE 2020, Bank Audi's Group Research Department

Energy Efficieny Renewable Energy

Algeria 58 45

Bahrain 35 33

Egypt 60 77

Jordan 73 75

Kuwait 41 28

Lebanon 47 67

Morocco 60 71

Oman 18 51

Qatar 53 47

KSA 59 39

Tunisia 72 79

UAE 74 78

West Bank & Gaza 32 30

Yemen 7 26



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With regards to inflation, the country’s CPI is estimated to reach 90.0% in 2020, and forecast at 43.5% and 11.6% in 2021 and 2022 respectively, as per the same source.

Lebanon’s current account balance is anticipated to attain a deficit of 15.4% of GDP in 2020, and a deficit of 13.0% and 12.0% of GDP in 2021 and 2022 respectively, as per the Bloomberg survey.

Last but not least, the country’s budget balance, as a percentage of GDP, is estimated to post a deficit of 10.9% in 2020. The latter is expected to reach a deficit of 8.5% and 7.1% of GDP in 2021 and 2022 respectively.

_____________________________________________________________________________LEBANON’S WEAK LOGISTICS PROFILE LARGELY STEMS FROM POOR INFRASTRUCTURE, AS PER FITCH SOLUTIONS

According to a recent report by Fitch Solutions, Lebanon’s weak logistics profile largely stems from poor infrastructure due to civil unrest, regional conflict and underinvestment in the transport and utilities sectors. Limited domestic energy resources means that the country is reliant on imported fuel for its power and transport needs. This drives up operating costs and elevates the risk of disruptions to utilities supply.

The State’s water pollution crisis has negatively impacted the quality of drinking water available, increasing business costs as potable water would need to be supplied to the workforce. Complex and costly border compliance procedures make it challenging for cross border traders.

It is worth noting that businesses involved in maritime freight will experience congestion and delays due to damages to the Port of Beirut from the August 2020 blast. Although alternative ports are being used, capacity constraints will negatively impact supply chains.

Overall, Lebanon scores a moderate 44.4 out of 100 for Logistics Risk and ranks 111th out of 201 States globally. On trade procedures and governance, Lebanon scored 32.2 out of 100. In this context, high border compliance costs and onerous bureaucracy make cross border trade in Lebanon uncompetitive relative to regional peers.

Years of underinvestment in hard infrastructure, policy inertia, the ongoing Syrian conflict and other regional security concerns have limited the development of the State’s transportation options. As a result, businesses face the risk of congestion at ports and airports, which can delay the transit of freight. Damage to the port of Beirut due to the August 2020 blast means maritime freight will be constrained until the Beirut port is rebuilt.

On the level of Utilities Network, Lebanon scored 47.3/100. Lebanon is one of the few MENA countries that is not rich in some type of energy resource. Limited energy resources mean that over 90% of the State's electricity supply is generated using oil.

The country’s reliance on imported fuel for its electricity and transport needs drives up costs for supply chains and energy-intensive operations.

Businesses are exposed to erratic power supply due to foreign currency shortages which disrupt the supply of fuel. The quality of internet and water infrastructure is poor, with limited internet coverage outside major urban areas and water shortages disrupting production in water-intensive sectors. On a positive note, the World Bank and European Investment Bank have committed significant funding to help improve Lebanon.



CORPORATE NEWS_____________________________________________________________________________BANKERS TOPS LEBANESE INSURANCE COMPANIES IN GROSS WRITTEN PREMIUMS IN FIRST THREE QUARTERS OF 2020, AS PER ICC According to the quarterly statistics report released by the Insurance Control Commission (ICC), gross written premiums stood at LP 1,787,073 million in the first three quarters of 2020, compared to LP 1,898,418 million in the same period of the previous year.

Bankers ranked first with gross written premiums standing at LP 164,128 million in the first nine months of 2020, up from LP 142,156 million in the corresponding period of 2019. These were divided as follows: LP 24,882 million for Life insurance, LP 44,577 million for motor insurance, LP 73,305 million for health insurance and LP 19,365 million for property and casualty insurance.

The number of claims reported 1,157,053 in 9M2020, down from 1,167,569 in the same period of last year. GroupMed ranked first in the number of claims reported with 123,944 divided as 715 for motor insurance, 122,809 for health insurance and 420 claims for property and casualty insurance.

Net investment income reported a negative LP 170,708 million in 9M2020, against a gain of LP 220,578 million in 9M2019. This loss was mainly due to loss of LP 129,517 million reported by Bancassurance.

Acquisition expenses registered LP 292,825 million in the first nine months of 2020, with Bankers ranking in the first position with expenses of LP 33,088 million. These were divided as LP 4,283 million for life insurance, LP 13,147 million for motor insurance, LP 11,465 million for health insurance and LP 4,193 million for property and casualty insurance.

The benefits paid stood at LP 1,175,319 million in 9M2020 with Allianz SNA coming in the first position with a total of LP 145,991 million.

Administrative expenses reported LP 211,657 million in the first nine months of 2020. ALICO came in the first place with a total of LP 16,061 million.

The ratio of paid claims to gross written premiums reported 66% in 9M2020 as compared to 62% in 9M2019.

___________________________________________________________________________INTERNATIONAL CONTRIBUTIONS TO LCRP AT US$ 1 BILLION IN FIRST NINE MONTHS OF 2020

International contributions to the Lebanon Crisis Response Plan (LCRP) reached US$ 1 billion in the first nine months of 2020 according to the United Nations. This represents just over a third of US$ 2.7 billion of what LCRP had appealed to cover the needs in 2020. An additional US$ 216 million were carried over from funding received in 2019.

Sources: ICC, Bank Audi's Group Research Department

TOP FIVE LEBANESE INSURANCE COMPANIES BY GROSS WRITTEN PREMIUMS (LP MILLION)

9M-2020 9M-2019

Bankers 164,128 142,156

Allianz SNA 154,993 171,129

Medgulf 147,324 111,307

ALICO 139,323 134,748

AXA ME 108,133 120,309



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Food disbursements reached US$ 273 million, "Basic Assistance" US$ 202 million, social protection US$ 72 million, education US$ 162 million and healthcare US$ 129 million.

"Basic Assistance" consists of strengthening the ability of vulnerable households to meet survival needs. This includes providing in-kind assistance for people affected by seasonal hazards and emergencies, and developing a national social safety net strategy. Around 612,000 individuals benefited from "Basic Assistance" out of 1.1 million targeted. Displaced Syrians accounted for 91% of the beneficiaries, 8% were Palestinian refugees, and less than 1% was for vulnerable Lebanese citizens.

The LCRP is a joint initiative between the Lebanese government and international and national partners that aims to address challenges posed by the large presence of Syrian refugees in the country. It groups over 100 partners including local ministries, international organizations, donor agencies and international and national NGOs.

_____________________________________________________________________________APAVE-LIBAN INTRODUCES “SAFE AND CLEAN” LABEL TO CERTIFY BUSINESSES WITH MEASURES AGAINST COVID Apave-Liban is developing a “Safe and Clean” label, which certifies that businesses, hotels or businesses comply with measures to combat the spread of the virus.

While no guarantee is 100% reliable, measures can limit the risk of the virus spreading in places open to the public.

In the absence of a similar guide in Lebanon, Apave Liban has chosen to implement the “Safe & Clean” label developed by its French parent company.

It is the only certification body to offer it in Lebanon to date.

About thirty local businesses have already used it. Schools, universities and factories have also called on the services of Apave-Liban.

The label, which attests to the proper implementation of preventive health measures facing the risk of COVID-19, can be displayed.

To obtain this label, the company must submit to an exhaustive preliminary audit: site visits, staff interviews, inventory of the arrangements made, compliance with barrier gestures, verification of the arrangements made to ensure physical distancing and reception procedures.



INTEREST RATES

CAPITAL MARKETS_____________________________________________________________________________MONEY MARKET: EXTENDED WEEKLY CONTRACTIONS IN RESIDENT DEPOSITS

The money market continued to witness ample local currency liquidity over this week, which kept the overnight rate stable at 3%, noting that its official rate remained quoted at 1.90%.

In parallel, the latest monetary aggregates released by the Central Bank of Lebanon for the week ending 10th of December 2020 showed that total resident banking deposits pursued their downward trajectory for the sixth consecutive week, falling by LP 607 billion. This is mainly driven by a LP 269 billion drop in total LP resident deposits amid a LP 127 billion decline in LP demand deposits and a LP 142 billion decrease in LP saving deposits, while foreign currency resident deposits fell by LP 338 billion (the equivalent of US$ 224 million as per the official rate of LP 1,507.5). Yet, the money supply in its largest sense (M4) expanded by LP 119 billion over the covered week amid a significant rise in the currency in circulation of LP 754 billion.

Within this context, it is worth mentioning that the currency in circulation crossed the LP 28,000 threshold on December 10, 2020 and compared to circa LP 10,000 billion at end-2019. This is mainly attributed to a strong LP money creation and LP deposit withdrawals.

______________________________________________________________________________TREASURY BILLS MARKET: NOMINAL WEEKLY SURPLUS OF LP 105 BILLION

The latest Treasury bills auction results for value date 24th of December 2020 showed that the Central Bank of Lebanon allowed banks to subscribe in full to the two-year category (offering a coupon of 5.0%) and the five-year category (offering a coupon of 6.0%).

In parallel, the Treasury bills auction results for value date 17th of December 2020 showed that total subscriptions amounted to LP 143 billion, distributed as follows: LP 17 billion in the six-month category (offering a yield of 4.0%), LP 17 billion in the two-year category (offering a coupon of 5.0%) and LP 109 billion in the ten-year category (offering a coupon of 7.0%). These compare to maturities of LP 38 billion, resulting into a shy nominal weekly surplus of LP 105 billion.

____________________________________________________________________________FOREIGN EXCHANGE MARKET: FLUCTUATIONS IN LP/US$ RATE ON MIXED CABINET NEWS

After failing to make a breakthrough in the stalled cabinet formation process and as subsidy reductions became imminent, the black FX market saw some fluctuations in the LP/US$ exchange rate over this four-day week. After closing at LP/US$ 8,400-LP/US$ 8,450 at the end of last week, the LP/US$ rate appreciated by circa 7% mid-week, hovering between LP/US$ 7,800 and LP/US$ 7,900, mainly on hopes that a new

Source: Bloomberg

24/12/20 18/12/20 27/12/19

Overnight rate (official) 1.90% 1.90% 3.90% ⬌7 days rate 2.00% 2.00% 4.00% ⬌1 month rate 2.75% 2.75% 4.75% ⬌45-day CDs 2.90% 2.90% 4.90% ⬌60-day CDs 3.08% 3.08% 5.08% ⬌



10

EXCHANGE RATES

TREASURY BILLS

government would be formed before Christmas. Yet, the LP/US$ rate resumed its fall on Thursday, closing at LP/US$ 8,350-LP/US$ 8,400, as hopes for breaking the cabinet formation impasse were dashed. In parallel, the Central Bank governor said this week that BDL has more than US$ 2 billion in reserves that can be used in subsidies.

__________________________________________________________________________STOCK MARKET: EXTENDED WEEKLY PRICE GAINS ON BSE

Lebanon’s equity market continued to trace an upward trajectory for the third consecutive week, as reflected by a 1.2% rise in the BSE price index, mainly supported by price gains in Solidere and some banking shares. Seven out of eight traded stocks registered price increases, while one stock saw no price change week-on-week.

Source: Bank Audi’s Group Research Department

Sources: Central Bank of Lebanon, Bloomberg

24/12/20 18/12/20 27/12/193-month 3.50% 3.50% 5.30% ⬌6-month 4.00% 4.00% 5.85% ⬌1-year 4.50% 4.50% 6.50% ⬌2-year 5.00% 5.00% 7.00% ⬌3-year 5.50% 5.50% 7.50% ⬌5-year 6.00% 6.00% 8.00% ⬌10-year - 7.00% 10.00%

Nom. Subs. (LP billion) 143 120

Short-term (3&6 mths) 17 -

Medium-term (1&2 yrs) 17 20

Long-term (3 yrs) - -

Long-term (5 yrs) - 100

Long-term (10 yrs) 109 -

Maturities 38 61

Nom. Surplus/Deficit 105 59

24/12/20 18/12/20 27/12/19LP/US$ 1,507.50 1,507.50 1,507.50 ⬌LP/£ 2,051.56 2,034.07 1,970.00 ⬇LP/¥ 14.54 14.56 13.77 ⬆LP/SF 1,696.49 1,703.39 1,543.78 ⬆LP/Can$ 1,174.16 1,181.43 1,150.59 ⬆LP/Euro 1,837.94 1,846.69 1,679.20 ⬆



AUDI INDICES FOR BSE

EUROBONDS INDICATORS

Source: Bank Audi’s Group Research Department

Sources: Beirut Stock Exchange, Bank Audi’s Group Research Department

_____________________________________________________________________________BOND MARKET: STATUS-QUO MOOD REIGNS OVER EUROBOND MARKET AMID CABINET DEADLOCK

A status-quo mood swayed over Lebanon’s Eurobond market ahead of Christmas holidays. Prices of sovereigns remained quoted at low-teens, hovering between 13.0 cents per US dollar and 14.13 cents per US dollar, as “clear complications” continued to hinder the formation of a new government and on prospects of delayed negotiations with bondholders. In parallel, the weighted average bond yield reached 57% at the end of this week, while the average bond life declined further to 7.06 years as compared to 7.50 years at end-2019.

A closer look at individual stocks shows that Bank Audi GDRs led the advance on the BSE this week, surging by 7.8% to close at US$ 1.10, followed by Byblos Bank Preferred shares 2008 with +7.5% to US$ 43.0, Solidere “A” shares with +4.5% to US$ 16.98, Solidere “B” shares with +3.3% to US$ 16.75, BLOM’s “listed” shares with +1.0% to US$ 2.07, Bank Audi’s “listed” shares with +0.8% to US$ 1.22 and BLOM’s GDRs with +0.5% to US$ 2.01. In contrast, Byblos Bank’s “listed” share price remained unchanged at US$ 0.52. As to trading volumes, the BSE total turnover contracted by 4.8% week-on-week, noting that Solidere shares continued to capture the lion’s share of activity (96%) amid a flight to realty stocks.

22/1/96=100 24/12/20 18/12/20 27/12/19Market Cap. Index 289.15 285.65 316.37 ⬆Trading Vol. Index 53.76 45.15 24.97 ⬆Price Index 60.70 59.97 69.36 ⬆Change % 1.22% 0.20% 2.37% ⬆

24/12/20 18/12/20 27/12/19

Market Cap. $m 6,860 6,777 7,506 ⬆No. of shares traded (Exc. BT) 407,403 427,754 333,997 ⬇Value Traded $000 (Exc. BT) 4,827 5,069 2,294 ⬇o.w. : Solidere 4,640 4,842 2,294 ⬇ Banks 187 90 0 ⬆ Others 0 137 0 ⬇

24/12/20 18/12/20 27/12/19Total tradable size $m 32,664 32,664 29,564 ⬌o.w.: Sovereign bonds 31,314 31,314 28,314 ⬌Average Yield 57% 56% 29.99% ⬆Average Life 7.06 7.07 7.50 ⬇Yield on US 5-year note 0.37% 0.37% 1.71% ⬌



12

INTERNATIONAL MARKET INDICATORS

Sources: Bloomberg, Bank Audi's Group Research Department

___________________________________________________________________________DISCLAIMER

The content of this publication is provided as general information only and should not be taken as an advice to invest or engage in any form of financial or commercial activity. Any action that you may take as a result of information in this publication remains your sole responsibility. None of the materials herein constitute offers or solicitations to purchase or sell securities, your investment decisions should not be made based upon the information herein.

Although Bank Audi sal considers the content of this publication reliable, it shall have no liability for its content and makes no warranty, representation or guarantee as to its accuracy or completeness.

25-Dec-20 18-Dec-20 31-Dec-19 Weekly change

Year-to-date change

EXCHANGE RATES

YEN/$ 103.42 103.31 108.64 0.1% -4.8%

$/£ 1.356 1.352 1.326 0.3% 2.3%

$/Euro 1.219 1.226 1.121 -0.5% 8.7%

STOCK INDICESDOW JONES INDUSTRIAL AVERAGE 30,199.87 30,179.05 28,538.44 0.1% 5.8%

S&P 500 3,703.06 3,709.41 3,230.78 -0.2% 14.6%

NASDAQ 12,804.73 12,755.64 8,972.60 0.4% 42.7%

CAC 40 5,522.01 5,527.84 5,978.06 -0.1% -7.6%

Xetra Dax 13,587.23 13,630.51 13,249.01 -0.3% 2.6%

FT-SE 100 6,502.11 6,529.18 7,542.44 -0.4% -13.8%

NIKKEI 225 26,656.61 26,763.39 23,656.62 -0.4% 12.7%

COMMODITIES (in US$)

GOLD OUNCE 1,883.46 1,881.35 1,517.27 0.1% 24.1%

SILVER OUNCE 25.83 25.81 17.85 0.1% 44.7%

BRENT CRUDE (per barrel) 51.29 52.26 62.93 -1.9% -18.5%

LEADING INTEREST RATES (%)

1-month Libor 0.15 0.14 1.76 0.01 -1.61

US Prime Rate 3.25 3.25 4.75 0.00 -1.50

US Discount Rate 0.25 0.25 2.25 0.00 -2.00

US 10-year Bond 0.92 0.95 1.92 -0.03 -1.00

lebanon weekly monitor...lebanon’s external sector witnessed a considerable drop in trade deficit...

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