weekly market watch - credit libanais...weekly market watch economic research unit - sofil center,...

ISSUE NO. 391 DECEMBER 2ND 2013 – DECEMBER 6TH 2013

ECONOMIC RESEARCH UNIT

WEEKLY MARKET WATCH

TTAABBLL EE

OOFF CC

OONN

TTEENN

TTSS

LLEEBBAANNOONN NEWS

ECONOMIC INSIGHTS

> Lebanon Ranks 127th Worldwide and 13th on a Regional Basis in the 2013 Corruption Perceptions Index 1

> UNCTAD Publishes its “Information Economy Report 2013” 2 > Lebanon Ranks 87th in the World and 9th in the Region in

Terms of Best Countries for Business for the Year 2013 3 > The Consolidated Balance Sheet of Lebanese Banks Rises by

7.54% Y-O-Y Up to October 2013 4 > Lebanon’s Inflation Rate Reaches 0.80% in October 2013 5 > Lebanon’s Coincident Indicator Rises by 1.52% Y-O-Y in

September 2013 5 > The Number of Cleared Checks Rises to Around 12.12 Million

Up to November 2013 6 > Total Reserves at Banque Du Liban Stood at $46.99 Billion as

at End of November 2013 7 > Beirut Stock Exchange Activity Slumps by 8.25% Y-O-Y Up to

November 2013 8 > Transfers to Electricité Du Liban (EDL) Reach $1,509.78 Million

Up to August 2013 9 CORPORATE NEWS > Bank Audi Egypt S.A.E. Casts a Sizeable Increase in Net

Profits to $43.00 million Up to September 2013 10 > ODEABANK A.Ş. Suffers a Net Loss of $53.83 Million Up to

September 2013 11

MONETARY PERFORMANCE & PUBLIC FINANCE > Monetary Aggregates 12 > Money Markets 12 > Gross Public Debt Attains $62.44 Billion in October 2013 13

FIXED INCOME

> Fixed Income 14 LEBANESE EQUITIES

> Lebanese Equities & Credit Libanais Indices 15

Lebanon's Economic & Financial Sector Indicators 17 Lebanon's Ratings 18

LEBANON RANKS 127TH WORLDWIDE

AND 13TH ON A REGIONAL BASIS IN THE

2013 CORRUPTION PERCEPTIONS

INDEX

Transparency International’s “2013

Corruption Perceptions Index” assigned

Lebanon a score of 28, occupying as such

the 127th place in the world in terms of

government corruption and the 13th place

in the region.

UNCTAD PUBLISHES ITS

“INFORMATION ECONOMY REPORT

2013”

According to the UNCTAD’s latest report,

Lebanon ranked last in terms of

international internet bandwidth among

Arab countries in the year 2011, with the

latter standing at 2,257 bps per internet

user.

LEBANON RANKS 87TH IN THE WORLD

AND 9TH IN THE REGION IN TERMS OF

BEST COUNTRIES FOR BUSINESS FOR

THE YEAR 2013

Forbes magazine positioned Lebanon as

the 87th best country for business in the

world and 9th in the region in the year

2013. On a global basis, Lebanon came

right behind Serbia (86th) and ahead of

Moldova (88th).

THE NUMBER OF CLEARED CHECKS

RISES TO AROUND 12.12 MILLION UP

TO NOVEMBER 2013

According to ABL statistics, the value of

cleared checks has reached LBP 99,612

billion (12,117,216 checks) by the end of

November 2013, up from LBP 98,007

billion (11,953,413 checks) over that

same period last year.

Weekly Market Watch

ECONOMIC RESEARCH UNIT - SOFIL CENTER, BEIRUT LEBANON - TEL: 01-200028/9 FAX: 01-326786

Weekly Market Watch

ECONOMIC RESEARCH UNIT - SOFIL CENTER, BEIRUT LEBANON - TEL: 01-200028/9 FAX: 01-326786

SSYYNN

OOPP SS

II SS OO

FF TTEERRMM

SS

"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 "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

"FOMC" Federal Open Market Committee

“LE” Livre Egyptienne – Egyptian Pound

“SAR” Saudi Arabian Riyal “AED” United Arab Emirates Dirham “BD” Bahraini Dinar

LLEEBBAANN

OONN

NNEEWW

SS

LEBANON RANKS 127TH WORLDWIDE AND 13TH ON A REGIONAL BASIS IN THE 2013 CORRUPTION

PERCEPTIONS INDEX

Transparency International, a non-governmental organization fighting against corruption, published the “2013 Corruption Perceptions Index” on December 3, 2013, in which it ranks 177 countries across the globe based on their perceived level of public sector corruption, with scores ranging between “0” (highly corrupted) and “100” (very clean). The “2013 Corruption Perceptions Index” assigned Lebanon a score of 28, occupying as such the 127th place in the world in terms of government corruption and the 13th place in the region, advancing as such from the 128th global rank and 15th regional place it occupied in the year 2012. Lebanon came in on equal footings with Mali, Pakistan, and Russia, while coming right ahead of Bangladesh, Ivory Coast, Guyana, and Kenya, all of which occupying the 136th place (score: 27). On a regional basis, Lebanon outperformed Iran (144th <score: 25>), Yemen (167th <score: 18>), Syria (168th <score: 17>), Iraq (171st <score: 16>), Libya (172nd <score: 15>), and Sudan (174th <score: 11>). Denmark and New Zealand co-ranked 1st in the 2013 corruption perceptions index with a score of 91, followed by Sweden and Finland, which scored 89 each. On a regional basis, the United Arab Emirates topped the list as the least corrupted countries in the Middle East region, with a score of 69 and a global rank of 26. Qatar ranked 2nd in the Middle East region and 28th on a global basis, with a score of 68 in the 2013 corruption perceptions index.

Weekly Market Watch

SOURCE: TRANSPARENCY INTERNATIONAL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 1

Country Score Global Rank

Denmark 91 1

New Zealand 91 1

Sweden 89 3

Finland 89 3

United Arab Emirates 69 26

Qatar 68 28

Cyprus 63 31

Israel 61 36

Turkey 50 53

Bahrain 48 57

Oman 47 61

Saudi Arabia 46 63

Jordan 45 66

Kuwait 43 69

Tunisia 41 77

Morocco 37 91

Algeria 36 94

Egypt 32 114

Lebanon 28 127

Iran 25 144

Yemen 18 167

Syria 17 168

Iraq 16 171

Libya 15 172

Sudan 11 174

Afghanistan 8 175

North Korea 8 175

Somalia 8 175Source: Transparency International, Credit Libanais Economic Research Unit

Corruption Perceptions Index 2013

0 5 10 15 20

United Arab Emirates

Qatar

Israel

Bahrain

Oman

Saudi Arabia

Jordan

Kuwait

Tunisia

Morocco

Algeria

Egypt

Lebanon

Iran

Yemen

Syria

Iraq

Libya

Sudan

12

34

56

7

89

10

11

12

13

14

15

16

17

18

19

Regional Ranking of Major Middle Eastern Countries in the 2013 Corruption Perceptions Index

Source: Transparency International, Credit Libanais Economic Research Unit

LLEEBBAANN

OONN

NNEEWW

SS

UNCTAD PUBLISHES ITS “INFORMATION ECONOMY REPORT 2013”

The United Nations Conference on Trade and Development (“UNCTAD”) published on the 3rd of December its report titled “Information Economy Report 2013 – The Cloud Economy and Developing Countries”, in which it analyzes the possible implications of the cloud computing economy on developing countries. According to the report, Lebanon ranked last in terms of international internet bandwidth among Arab countries in the year 2011, with the latter standing at 2,257 bps per internet user. Saudi Arabia topped the list of Arab countries with an international internet bandwidth of 32,985 bps per internet user in the year 2011, followed by the United Arab Emirates (27,609 bps per internet user; rank: 2nd) and Tunisia (14,832 bps per internet user; rank: 3rd). The report also stated that Lebanon had a mobile download speed of 1,300 kbps in the year 2012, with only one co-location data centre, and enjoyed 51.3 secure internet servers per one million people. On the other hand, the report commented that Lebanon positioned among countries that failed to meet requirements for basic cloud services in the year 2012, according to “Cisco Analysis”. On a more global basis, the UNCTAD report shows that the gap in access to basic telephone services has been tightening around the world, while the gap in access to broadband services or the internet has been widening between developed and developing economies. The report highlights as well the importance of cloud computing services for developing countries where individuals, businesses, and the government could take advantage of new information and communication technologies (ICTs) such as cloud computing to boost efficiency through facilitating access to information, and promote growth in both the private and public sectors. The UNCTAD report acknowledges, however, the existing trade-off between cost savings, on the one hand, and data security and privacy on the other. The report stresses on the necessity to further develop the cloud economy “Ecosystem”, especially in the Middle East and Africa region, in an endeavor to stimulate growth and innovation in the ICT sector. In fact, the report shows that North America and Europe accounted for more than 60% of cloud traffic on the internet, while Latin America and the Middle East and Africa region accounted for only 5%. Finally, the report addresses the need for expertise in various fields as well as financial resources by development partners and organizations in order to further develop the ICT sector and, most importantly, the cloud economy ecosystem.

Weekly Market Watch

SOURCE: UNCTAD, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 2

Mobile Download

(kbps)

Co-location Data Centres,

2013

International Internet Bandwidth,

2011 (bps per internet user)

Secure Internet Servers (per 1 million people)

World:United States 2,366 1,144 47,174 1,501.0 France 2,196 123 78,590 424.9 Germany 2,847 144 74,786 1,102.4 United Kingdom 2,480 191 166,073 1,534.1 Japan 6,141 36 23,111 774.3 China 1,499 17 2,692 3.1 MENA Region:Saudi Arabia 2,696 10 32,985 29.9 United Arab Emirates - 4 27,609 206.8 Bahrain 1,870 1 14,719 137.6 Kuwait 1,854 1 - 202.3 Lebanon 1,300 1 2,257 51.3 Iraq 2,046 - - 0.1 Syrian Arab Republic - - 3,489 0.3 Tunisia 1,565 - 14,832 13.0 Egypt - 9 6,754 3.7 Source: UNCTAD, Credit Libanais Economic Research Unit

Key Cloud Service Infrastructure Indicators

‐ 10,000 20,000 30,000 40,000

Lebanon

Syrian Arab Republic

Egypt

Bahrain

Tunisia


Saudi Arabia

2,257

3,489

6,754

14,719

14,832

27,609

32,985

Source: UNCTAD, Credit Libanais Economic Research Unit

Internet Bandwidth, 2011 (bps per internet user)

LLEEBBAANN

OONN

NNEEWW

SS

LEBANON RANKS 87TH IN THE WORLD AND 9TH IN THE REGION IN TERMS OF BEST COUNTRIES FOR BUSINESS

FOR THE YEAR 2013

Forbes Magazine published this week its “2013 Best Countries for Business” report, in which it ranks the best 145 countries around the globe in terms of best countries for doing business based on their respective 2013 rankings in each of the “Economic Freedom Index” (Heritage Foundation), “Global Competitiveness Report” (World Economic Forum), “Corruption Perceptions Index” (Transparency International), “Personal Freedom Index” (Freedom House), “Doing Business” (World Bank), “World Factbook” (Central Intelligence Agency), and “International Property Rights Index” (Property Rights Alliance). In this perspective, Forbes Magazine positioned Lebanon as the 87th best country for business in the world and 9th in the region in the year 2013. On a global basis, Lebanon came right behind Serbia (86th) and ahead of Moldova (88th). On a regional scale, Lebanon outperformed Egypt (116th), Algeria (131st), Yemen (133rd), and Libya (136th). Regionally, the United Arab Emirates (UAE) topped the list in terms of “best countries for business” for the year 2013, while coming in 31st on a global scale. Concurrently, Qatar ranked 2nd in the Arab world and 40th in the world, followed by Saudi Arabia (global rank: 56th) and Bahrain (global rank: 59th). On the international scene, Ireland advanced from the 6th place it had occupied in the year 2012 to stand as the best country for business in the world in the year 2013, followed by New Zealand and Hong Kong on a respective basis.

Weekly Market Watch

SOURCE: FORBES MAGAZINE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 3

Country 2013 Rank

Ireland 1New Zealand 2Hong Kong 3Denmark 4Sweden 5United States 14

United Arab Emirates 31

Qatar 40

Saudi Arabia 56

Bahrain 59

Jordan 65

Kuwait 76

Tunisia 77

Morocco 78

Lebanon 87

Egypt 116

Algeria 131

Yemen 133

Libya 136

Best Countries for Business

Source: Forbes M agazine, Credit Libanais Economic Research Unit

0 2 4 6 8 10 12 14


Qatar

Saudi Arabia

Bahrain

Jordan

Kuwait

Tunisia

Morocco

Lebanon

Egypt

Algeria

Yemen

Libya

1

2

3

4

5

6

7

8

9

10

11

12

13

Regional Ranking of Best Arab Countries for Business for the Year 2013

Source: Forbes Magazine, Credit Libanais Economic Research Unit

LLEEBBAANN

OONN

NNEEWW

SS

THE CONSOLIDATED BALANCE SHEET OF LEBANESE BANKS RISES BY 7.54% Y-O-Y UP TO OCTOBER 2013

The consolidated balance sheet of commercial banks operating in Lebanon rose by LBP 2,075 billion ($1.38 billion) during the month of October 2013 to LBP 242,154 billion ($160.63 billion), up from LBP 240,079 billion ($159.26 billion) in September. Said expansion is mainly attributed to the 1.09% increase in claims on the public sector to LBP 55,169 billion ($36.60 billion). On an annual basis, the consolidated assets of the banking sector came in 7.54% higher from LBP 225,183 billion ($149.38 billion) as at end of October 2012. The banking sector’s balance sheet has registered an average monthly growth rate of 0.53% over the first ten months of 2013, compared to an average monthly growth rate of 0.61% during that same period in 2012. The sector remains highly liquid, with the primary liquidity ratio increasing to 78.42%, from 77.94% in October 2012. The compounded annual growth rate (CAGR) in the consolidated assets of the banking sector has reached 11.64% over the October 2006 – October 2013 period, as captured by the chart hereunder: Customer deposits extended their upturn in October, adding LBP 1,127 billion ($747.60 million) month-on-month to LBP 203,464 billion ($134.97 billion), up from LBP 202,337 billion ($134.22 billion) in September. The annual growth in deposits stood at 7.97% in October of this year when benchmarked to last year’s reading of LBP 188,447 billion ($125.01 billion). The average monthly growth in customer deposits stood at 0.56% in the first ten months of 2013, trailing behind the 0.60% average monthly growth recorded in the same period in 2012. It is worth noting that the sustained political and security tensions continue to paralyze economic activity, triggering an increase in the deposits’ dollarization rate to 65.67% in October, from 65.65% in September, and 64.72% in October of last year.

On the lending front, loans to the private sector firmed at LBP 70,098 billion ($46.50 billion) by end of October 2013, from LBP 69,168 billion ($45.88 billion) in September. The annual growth in consolidated loans came in 8.75% higher from LBP 64,458 billion ($42.76 billion) in October of last year. Consequently, the ratio of customer loans to customer deposits prolonged its gaining streak, reaching 34.45% in October, up from 34.18% in September and 34.20% in October of last year.

Weekly Market Watch

SOURCE: ABL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 4

USD Billion 2007 2008 2009 2010 2011 Oct-2012 2012 Oct-2013

Total Assets 82.25 94.26 115.25 128.93 140.58 149.38 151.88 160.63

Loans to the Private Sector 20.43 25.04 28.37 34.93 39.38 42.76 43.45 46.50

Customer Deposits 68.06 78.66 96.82 108.60 117.70 125.01 127.66 134.97

Capital Accounts 6.26 7.10 7.94 9.22 10.72 11.88 12.64 14.16

Dollarization Rate 77.34% 69.57% 64.46% 63.24% 65.92% 64.72% 64.82% 65.67%

Private Sector Loans/Deposits Ratio 30.01% 31.83% 29.31% 32.16% 33.45% 34.20% 34.04% 34.45%

- LBP Private Sector Loans/LBP Deposits 17.35% 13.69% 12.93% 16.88% 20.53% 21.12% 20.84% 22.48%

- FC Private Sector Loans/FC Deposits 33.91% 40.06% 38.62% 41.36% 40.47% 41.73% 41.63% 41.10%Source: The Association of Banks in Lebanon, Credit Libanais Economic Research Unit

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

Oct-2006

2006 2007 2008 2009 2010 2011 2012 Oct-2013

74.34 76.18 82.2594.26

115.25128.93

140.58151.88 160.63

US

D B

illi

on

Evolution of Commercial Banks' Consolidated Assets

Source: ABL, Credit Libanais Economic Research Unit

0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

2007 2008 2009 2010 2011 Oct-2012 2012 Oct-2013

Activity in the Lebanese Banking Sector

Loans (USD Billion) Deposits (USD Billion)Dollarization Rate (Deposits) Loans/Deposits Ratio


LLEEBBAANN

OONN

NNEEWW

SS

LEBANON’S INFLATION RATE REACHES 0.80% IN OCTOBER 2013

According to the Association of Banks in Lebanon (ABL), inflation, as captured by the annual change in ABL’s consumer price index (CPI), hit the 0.80% mark during the month of October 2013. More specifically, October’s CPI reached 150.55, up from 149.36 a year before. Lebanon’s CPI came in 0.22% higher on a monthly basis in October, after having posted a 0.96% monthly increase in September and a 0.64% expansion in August. LEBANON’S COINCIDENT INDICATOR RISES BY 1.52% Y-O-Y IN SEPTEMBER 2013

Banque Du Liban’s coincident indicator, which is an indicative measure of the country’s overall economic activity, posted a monthly expansion of 0.98% in September 2013 to 247.2, up from 244.8 in August. The coincident indicator came in 1.52% higher on a twelve-month basis, from a reading of 243.5 in September 2012, thus portraying a shy improvement in the overall macroeconomic environment. The coincident indicator has registered an average monthly contraction of 0.63% during the first nine months of the year 2013, comparing to a 0.85% average monthly drop in the same period in 2012.

Weekly Market Watch


CPIMonthly

% ChangeYearly %

Change

Oct-2012 149.36 0.56% 7.75%

Nov-2012 150.20 0.56% 6.97%

Dec-2012 145.92 -2.85% 4.68%

Jan-2013 149.52 2.47% 4.32%

Feb-2013 148.58 -0.63% 4.42%

Mar-2013 149.78 0.81% 4.57%

Apr-2013 149.75 -0.02% 2.94%

May-2013 149.47 -0.19% 2.43%

June-2013 149.02 -0.30% 3.72%

July-2013 147.84 -0.79% 1.80%

Aug-2013 148.79 0.64% 2.46%

Sept-2013 150.22 0.96% 1.14%

Oct-2013 150.55 0.22% 0.80%Source: ABL, Credit Libanais Economic Research Unit

-4.00%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

143.00

144.00

145.00

146.00

147.00

148.00

149.00

150.00

151.00

Oct

-2012

Nov-2

012

Dec-

2012

Jan-2

013

Feb-2

013

Mar-

2013

Apr-

2013

May-2

013

June-2

013

July

-2013

Aug-2

013

Sept-

2013

Oct

-2013

Evolution of Lebanon's Consumer Price Index

Consumer Price Index CPI (%)


225

230

235

240

245

250

255

260

265

270

275

Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13

243.5

255.6

260.8262.5

263.9

270.6

273.9272.0 272.7

265.5

248.7

244.8

247.2

Evolution of Lebanon's Coincident Indicator


LLEEBBAANN

OONN

NNEEWW

SS

THE NUMBER OF CLEARED CHECKS RISES TO AROUND 12.12 MILLION UP TO NOVEMBER 2013

According to ABL statistics, the value of cleared checks has reached LBP 99,612 billion (12,117,216 checks) by the end of November 2013, up from LBP 98,007 billion (11,953,413 checks) over that same period last year. Of the total value of cleared checks, 76.57% was denominated in foreign currencies, versus 79.02% in the same period last year. The value of returned checks, however, rose by LBP 49 billion (2.25%) on an annual basis to LBP 2,136 billion, with the number of returned checks easing by 4.15% y-o-y to 246,171. This is further illustrated in the section below: On a monthly basis, the value of cleared checks narrowed by 2.89% to LBP 9,097 billion during the month of November alone, down from LBP 9,368 billion in October. On the other hand, the value of returned checks rose by 6.00% month-on-month to LBP 206 billion in November of the current year. The number of returned checks, expressed as a percentage of the total number of cleared checks, dropped to 2.03% as at end of November 2013, with the value of returned checks inching upwards to 2.14% of total cleared checks’ value up from a 2.13% proportion during the same period in 2012.

Weekly Market Watch


Billion Number Billion Number Value Volume

Cleared Checks-LBP Denominated LBP 20,559 3,289,631 LBP 23,340 3,574,241 13.53% 8.65% Returned Checks-LBP Denominated LBP 300 57,925 LBP 333 58,184 11.00% 0.45%

Cleared Checks-Foreign Currency Denominated $51.360 8,663,782 $50.578 8,542,975 -1.52% -1.39% Returned Checks-Foreign Currency Denominated $1.188 198,917 $1.195 187,987 0.59% -5.49%

Total Cleared Checks LBP 98,007 11,953,413 LBP 99,612 12,117,216 1.64% 1.37%

Total Returned Checks LBP 2,089 256,842 LBP 2,136 246,171 2.25% -4.15%Source: Association of Banks in Lebanon, Credit Libanais Economic Research Unit

Check Clearing Activity Up to November 2012 Up to November 2013 Y-o-Y % Change

LBP-Denominated

29.50%

Foreign Currency-

Denominated70.50%

Breakdown of Clearing Activity By Volume


LBP-Denominated

23.43%

Foreign Currency-

Denominated76.57%

Breakdown of Clearing Activity By Value


2.13%

1.46%

2.31%2.14%

1.43%

2.36%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

Total LBP FC

Nov‐2012 Nov‐2013

Returned Checks as a Percentage of Cleared Checks (Value)


2.15%

1.76%

2.30%

2.03%

1.63%

2.20%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

Total LBP FC

Nov‐2012 Nov‐2013

Returned Checks as a Percentage of Cleared Checks (Number)


LLEEBBAANN

OONN

NNEEWW

SS

TOTAL RESERVES AT BANQUE DU LIBAN STOOD AT $46.99 BILLION AS AT END OF NOVEMBER 2013

The Lebanese Central Bank published its bi-weekly balance sheet, conveying a 0.21% ($74.84 million) increase in the foreign assets (foreign currency reserves) portfolio to $35.49 billion as at end of November 2013, from $35.42 billion as at mid November. On an annual basis, however, foreign assets at BDL came in 0.52% lower when compared to the $35.68 billion reading recorded in end of November of last year. Concurrently, the value of gold reserves shed some $319.37 million (2.70%) during the second half of November 2013 to settle at $11.50 billion. This drop in gold reserves is attributed to positive U.S. economic data, namely the rising ISM Manufacturing Index and housing statistics, and the falling initial jobless claims, in addition to investors’ speculations concerning the tapering of the Federal Reserve’s quantitative easing program. Concurrently, gold reserves at Banque Du Liban (BDL) have depreciated by $4.43 billion (27.82%) on an annual basis from $15.94 billion as at end of November 2012. Total reserves (foreign currency and gold) at BDL came in $4.62 billion lower during the one-year period ending November 30, 2013 at $46.99 billion, down from $51.61 billion a year earlier, as elaborated hereunder: The Central Bank’s balance sheet dropped by $0.11 billion on a bi-weekly basis to $78.29 billion as at end of November 2013 on the back of the 0.52% contraction in total reserves to $46.99 billion, which outweighed the 0.20% increase in loans to the local financial sector to $2.19 billion.

The share of gold and foreign currency reserves eased to 60.02% of BDL’s total balance sheet as at end of November of the current year, compared to a higher proportion of 65.73% in the same period in 2012.

Weekly Market Watch

SOURCE: BDL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 7

$ BillionEnd of

November 2007End of

November 2008End of

November 2009End of

November 2010End of

November 2011End of

November 2012End of

November 2013Gold 7.34 7.50 10.79 12.67 15.83 15.94 11.50

Foreign Assets 12.37 19.13 27.21 30.81 32.31 35.68 35.49

Total Reserves 19.70 26.63 38.00 43.48 48.14 51.61 46.99Source: Banque Du Liban, Credit Libanais Economic Research Unit

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

End of November

2007

End of November

2008

End of November

2009

End of November

2010

End of November

2011

End of November

2012

End of November

2013

12.37

19.13

27.2130.81

32.31

35.68 35.49

$ Billion Evolution of Foreign Assets at Banque Du Liban

Source: Banque Du Liban, Credit Libanais Economic Research Unit

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

End of November

2007

End of November

2008

End of November

2009

End of November

2010

End of November

2011

End of November

2012

End of November

2013

7.34 7.50

10.79

12.67

15.83 15.94

11.50

$ Billion

Evolution of Gold Reserves at Banque Du Liban

Source: Banque Du Liban, Credit Libanais Economic Research Unit

$ BillionEnd of

November 2012

Mid November

2013

End of November

2013

Bi-weekly (% change)

Y-O-Y (% change)

Total Reserves 51.61 47.24 46.99 -0.52% -8.95%

Securities Portfolio 11.79 12.03 12.03 -0.04% 2.04%

Loans to Public Sector 0.04 0.00 0.00 - -

Loans to Local Financial Sector 1.62 2.19 2.19 0.20% 35.62%

Valuation Adjustment 0.00 0.00 0.00 0.00% 0.00%

Other Assets 13.21 16.67 16.81 0.81% 27.22%

Fixed Assets 0.26 0.27 0.27 -0.05% 5.52%

Total Assets 78.52 78.40 78.29 -0.14% -0.29%

Currency in Circulation Outside BDL 2.28 2.56 2.55 -0.37% 11.59%

Financial Sector Deposits 54.91 56.30 56.81 0.90% 3.46%

Public Sector Deposits 6.22 7.97 7.61 -4.51% 22.32%

Valuation Adjustment 10.39 6.32 6.03 -4.48% -41.92%

Other Liabilities 1.73 1.92 1.96 1.81% 13.02%

Capital Accounts 2.98 3.33 3.33 0.00% 11.65%

Total Liabilities 78.52 78.40 78.29 -0.14% -0.29%Source: Banque Du Liban, Credit Libanais Economic Research Unit

Total Reserves60.02%

Securities Portfolio15.36%

Loans to Public Sector0.00%

Loans to Local Financial Sector

2.80%

Valuation Adjustment

0.00%

Other Assets21.47%

Fixed Assets0.35%

Breakdown of BDL's Balance Sheet as at End of November 2013

Source: BDL, Credit Libanais Economic Research Unit

LLEEBBAANN

OONN

NNEEWW

SS

BEIRUT STOCK EXCHANGE ACTIVITY SLUMPS BY 8.25% Y-O-Y UP TO NOVEMBER 2013

According to the Beirut Stock Exchange (BSE) monthly bulletin, traded value rose to $108.27 million during the month of November 2013, up from $23.95 million in October, surpassing by far the $17.98 million reading registered in November of last year. This annual increase in traded value is explained by a block trade comprising of some 13.76 million Bank Audi listed shares on Tuesday, November 5, 2013, amid news of a selling shareholder disposing part of its ownership stake in the Bank. Concurrently, traded volume added 12.88 million shares during the month of November to 15.05 million shares, from 2.17 million shares in October. November’s traded volume came in significantly higher than the 1.82 million shares recorded during the month of November 2012. The bulk of trades during the month of November consisted of banking stocks (14,585,475 shares <96.94%>), with the lion’s share going to Bank Audi listed common shares (13,874,774 shares). The share of real estate stocks stood at 2.89% (435,278 shares) of total trades, followed by industry & trading stocks (25,496 shares <0.17%>). As far as market capitalization is concerned, the latter rose to around $10.64 billion in November 2013, up from $10.53 billion in October, and came in higher than the $10.01 billion level recorded in November of last year. On a cumulative basis, the aggregate traded value on the Beirut Bourse plunged to $345.11 million during the eleven-month period ending November 2013, comparing to $376.12 million in the same period last year. Traded volume was no exception, dropping by 0.86% y-o-y to just over 48 million shares. The lackluster activity on the BSE is reflective of the rising political tensions on both the local and regional fronts. The BSE’s weighted average Price to Book (P/BV) multiple notched slightly higher y-o-y to 1.02x in November, with the weighted average Price to Earning (P/E) ratio crawling sluggishly to 7.78x.

Weekly Market Watch

SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 8

Real Estate, 2.89%

Banks, 96.94%

Industry & Trading, 0.17%

Allocation of Traded Volume in November 2013

Real Estate4.54%

Banks95.19%

Industry & Trading0.27%

Allocation of Traded Value in November 2013

Nov-2012 Nov-2013 % ChangeTraded Value ($ 000) 376,119 345,105 -8.25%Traded Volume (000) 48,646 48,225 -0.86%Market Capitalization ($ Million) 10,006 10,635 6.29%Traded Value/Market Capitalization 3.76% 3.25%Turnover Ratio 2.89% 2.88%Weighted Average P/E 7.18 7.78Weighted Average P/BV 0.95 1.02

Analysis of the BSE Activity During the Eleven-Month Period Ending

Source: BSE, Credit Libanais Economic Research Unit

376,119345,105

48,646 48,225

10,006

10,635

9,6009,7009,8009,90010,00010,10010,20010,30010,40010,50010,60010,700

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Nov-2012 Nov-2013

Evolution of Beirut Bourse Cumulative Trading Activity

Traded Value ($ 000) Traded Volume (000)

Market Capitalization ($ Million)

LLEEBBAANN

OONN

NNEEWW

SS

TRANSFERS TO ELECTRICITÉ DU LIBAN (EDL) REACH $1,509.78 MILLION UP TO AUGUST 2013

The Lebanese Ministry of Finance published its monthly monitor, reporting a $24.98 million monthly expansion in government transfers to Electricité Du Liban (EDL) during the month of August 2013 to around LBP 446 billion ($296.46 million), up from LBP 409 billion ($271.48 million) in July. On a cumulative basis, transfers to EDL came in 4.80% higher y-o-y at LBP 2,276 billion ($1,509.78 million) through August 2013, compared to LBP 2,172 billion ($1,440.80 million) during that same period in 2012. Said increase was buoyed by the 5.70% expansion in gas and fuel purchases from Kuwait Petroleum Corporation (KPC) and Sonatrach to 2,214 billion ($1,468.66 million). It is worth noting, in this perspective, that the bulk (97.28%) of transfers to EDL up to the month of August was geared towards the financing of gas and fuel purchases. The following table captures the breakdown of transfers to EDL: The share of transfers to EDL of total government’s primary expenditures stood at 22.5% during the first eight months of 2013, compared to a higher 24.9% stake in the same period in 2012.

Weekly Market Watch

SOURCE: MOF, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 9

Transfers to EDL(USD Million) August-2012 August-2013Transfers to EDL, of which: 1,440.80 1,509.78 4.80% - Debt Service 51.08 41.13 -19.30% - Reimbursement for Purchase of Gas and Fuel 1,389.72 1,468.66 5.70%Source: The Lebanese Ministry of Finance, Credit Libanais Economic Research Unit

During the Eight-Month Period Ending Y-O-Y % Change

Transfers to EDL

22.5%

Other Primary Expenditures

77.5%

Share of Transfers to EDL of Primary Expenditures up to August 2013

Source: MOF, Credit Libanais Economic Research Unit

Transfers to EDL

24.9%

Other Primary

Expenditures75.1%

Share of Transfers to EDL of Primary Expenditures up to August 2012

Source: MOF, Credit Libanais Economic Research Unit

BANK AUDI EGYPT S.A.E. CASTS A SIZEABLE INCREASE IN NET PROFITS TO $43.00 MILLION UP TO

SEPTEMBER 2013

Bank Audi S.A.E., the Egyptian affiliate of Bank Audi S.A.L., released its quarterly unaudited financial statements for the first nine months of the year 2013, reporting a sharp 64.74% rally in net after tax profits to EGP 296.26 million ($43.00 million), up from EGP 179.83 million during that same period in 2012. In fact, the Bank’s net interest income rose by 14.63% y-o-y to EGP 531.20 million ($77.10 million) up to September, while net commission & fee income increased by 9.36% to EGP 118.39 million ($17.18 million). Consequently, net profit before income tax rose considerably by 40.93% y-o-y to EGP 429.25 million ($62.30 million) amid a significant yearly increase in gains from financial investments to EGP 46.72 million ($6.78 million), up from EGP 14.09 million a year before. On the balance sheet front, Bank Audi S.A.E.’s consolidated assets ended the third quarter of the current year up by 14.33% on a nine-month basis at around EGP 21.60 billion ($3.13 billion), with customer deposits firming at EGP 18.93 billion ($2.75 billion). Similarly, net customer loans rose to EGP 9.66 billion ($1.45 billion), with the ratio of net loans to customer deposits inching significantly lower to 52.66%, down from 57.93% as at end of year 2012. The Bank’s equity increased by 13.33% during the first three quarters of 2013 to around EGP 2.11 billion ($306.24 million), from EGP 1.86 billion as at end of year 2012.

Weekly Market Watch

SOURCE: BSE, BANK AUDI, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 10

In Millions of EGP

End of Year 2012

Up to September

2013

% Change

Key Balance Sheet FiguresTotal Assets 18,888.79 21,595.49 14.33%Net Loans and Acceptances 9,395.10 9,965.46 6.07%Customer Deposits 16,217.67 18,925.71 16.70%Shareholders' Equity 1,860.18 2,108.18 13.33%

Liquidity & Asset Quality Ratios (%)Net Loans to Customer Deposits 57.93% 52.66%

In Millions of EGP

Up to September

2012

Up to September

2013

% Change

Key P&L FiguresNet Interest Income 463.42 531.20 14.63%Net Commission and Fee Income 108.26 118.39 9.36%Net Profit Before Income Tax 304.59 429.25 40.93%Net Profits 179.83 296.26 64.74%

Bank Audi S.A.E.

Source: BSE, Bank Audi, Credit Libanais Economic Research Unit

0.00

50.00

100.00

150.00

200.00

250.00

300.00

Up to September 2012 Up to September 2013

179.83

296.26

Mil

lio

ns o

f E

GP

Bank Audi S.A.E.'s Net Profits

CCOO

RRPP OO

RRAATTEE NN

EEWW

SS

ODEABANK A.Ş. SUFFERS A NET LOSS OF $53.83 MILLION UP TO SEPTEMBER 2013

Bank Audi’s fully-owned Turkish subsidiary “Odeabank A.Ş.” has published its quarterly unaudited financial statements, unveiling net after tax losses of TRY 109.25 million (around $53.83 million) during the first nine months of the year 2013. Said loss is mainly attributed to the Bank’s short operating history given it launched operations in early January 2013, added the high loan loss provisioning level of TRY 85.95 million ($42.35 million) and the sizeable level of other operating expenses, which stood at TRY 158.46 million ($78.08 million), the thing which resulted in a net operating loss of TRY 119.21 million ($58.74 million). Odeabank A.Ş.’s net interest income stood at TRY 75.39 million ($37.15 million), with net commission & fee income aggregating to TRY 2.62 million ($1.29 million). On the balance sheet front, the consolidated assets of Odeabank A.Ş. rose markedly by 269.57% in the first nine months of 2013 to TRY 13.43 billion ($6.62 billion) as at end of September, with customer deposits rallying by 303.12% to just over TRY 10.14 billion ($5.00 billion). Concurrently, net loans followed suit, rising significantly by 394.92% to TRY 8.57 billion ($4.22 billion). The Bank’s ratio of net loans to customer deposits ended the first three quarters of 2013 up at 84.46%, with shareholders’ equity firming at TRY 946.36 million ($466.30 million), up from TRY 513.82 million as at year-end 2012.

Weekly Market Watch

SOURCE: BSE, BANK AUDI, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 11

CCOO

RRPP OO

RRAATTEE NN

EEWW

SS

In Millions of TRYEnd of Year

2012Q3-2013 % Change

Key Balance Sheet FiguresTotal Assets 3,634.18 13,430.89 269.57%Net Loans and Acceptances 1,731.69 8,570.53 394.92%Customer Deposits 2,517.15 10,147.07 303.12%Shareholders' Equity 513.82 946.36 84.18%

Liquidity Ratios (%)Net Loans to Customer Deposits 68.80% 84.46%

In Millions of TRY Q3-2013Key P&L FiguresNet Interest Income 75.39Net Commission and Fee Income 2.62Other Operating Income (trading gains, dividend income, others)

0.71

Total Operating Income 125.21Provision for Loan Losses 85.95Other Operating Expenses 158.46Net Operating Income/(Loss) (119.21)Net Profits/(Loss) (109.25)

Odeabank A.Ş.

Source: BSE, Bank Audi, Credit Libanais Economic Research Unit

MONETARY AGGREGATES

The overall money supply, “M4”, rose by $183.63 million week-on-week to around $115.38 billion during the week of November 21, 2013, and this amid the $43.12 million weekly increase in the non-banking sector treasury bills’ portfolio. Lebanese-pound denominated deposits and currency in circulation, “M1”, shed $57.57 million to $4.56 billion, dragged by some $76.95 million contraction in money in circulation, which outweighed the $19.24 million rise in demand deposits. In parallel, local currency term deposits, “M2”, notched slightly higher week-on-week, and registered a 5.04% year-on-year increase to around $44.71 billion. Consequently, private sector term and saving deposits denominated in LBP (“M2- M1”) firmed at $40.15 billion, with deposits denominated in foreign currencies (“M3–M2”) edging slightly higher to $64.54 billion. MONEY MARKETS

The November 28th Treasury bill auction raised around LBP 161.12 billion ($106.88 million), up from LBP 101.47 billion ($67.31 million) in the previous auction. The auction resulted in a deficit over nominal subscription of LBP 12.51 billion ($8.30 million), compared to a surplus of LBP 31.23 billion ($20.72 million) in the auction of the preceding week.

Subscriptions were majority (61.87%) concentrated in the three-year to maturity bills, followed by the two-year (23.79%) and one-year (14.34%) tenure bills.

The weighted average yield on Lebanese Pound Treasury bills fell to 6.18% during the auction of November 28, down from 8.63% during the latest auction of same maturities held on the 14th of November 2013, at a time when the Ministry of Finance issued new twelve-year tenure bills. The yields on the one-year, two-year, and three-year tenure T-bills remained unchanged at 5.35%, 5.84%, and 6.50% respectively.

Weekly Market Watch

SOURCE: BDL, REUTERS, ALMUSTAQBAL NEWSPAPER, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 12

MMOO

NNEETTAARRYY PP

EERRFF OO

RRMM

AANN

CCEE

Lebanese Treasury Bills 3 Months 6 Months 12 Months 24 Months 36 Months 60 Months 84 Months 96 Months 120 Months 144 Months

Treasury Yield 4.44% 4.99% 5.35% 5.84% 6.50% 6.75% 7.50% 7.80% 8.24% 8.74%

3 Months6 Months

12 Months24 Months

36 Months

60 Months

84 Months96 Months

120 Months144 Months

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

0 2 4 6 8 10 12

On The Run Yield Curve

M oney Supply

USD M illion .

M 1 4,615 4,557 -1.25%

M 2 44,676 44,712 0.08%

M 3 109,108 109,249 0.13%

M 4 115,198 115,382 0.16%

M 2-M 1 40,061 40,154 0.23%

M 3-M 2 64,432 64,537 0.16%Source: Banque Du Liban, Credit Libanais Economic Research Unit

November 14, 2013 November 21, 2013 % Change

6,000

26,000

46,000

66,000

86,000

November 14, 2013 November 21, 2013

115,198 115,382109,108 109,249

Money Supply - USD Million -

M4 M3

Source: BDL, Credit Libanais Economic Research Unit

Lebanese Treasury Bills

Yield (%) Face Value ( in billio ns o f

LB P )

% of Total Face Value

Lebanese Treasury Bills

Yield (%) Face Value ( in billio ns o f

LB P )

% of Total Face Value

3 Months 4.44% 56.415 55.60% 12 Months 5.35% 23.110 14.34%

6 Months 4.99% 39.747 39.17% 24 Months 5.84% 38.323 23.79%60 Months 6.75% 5.306 5.23% 36 Months 6.50% 99.684 61.87%

Total 101.468 100% Total 161.117 100%Source: Reuters, Credit Libanais Economic Research Unit

November 21, 2013 Auction November 28, 2013 Auction

GROSS PUBLIC DEBT ATTAINS $62.44 BILLION IN OCTOBER 2013

On the public finance front, Lebanon’s gross public debt widened by $45.11 million during the month of October 2013 to $62.44 billion, up from $62.39 billion in September. On an annual basis, however, gross public debt accumulated steam at a rate of 10.24%, from $56.64 billion as at end of October 2012. Domestic debt grew by 0.30% on a monthly basis, yet registered a yearly increase of 6.72% to $36.09 billion. On the other hand, external debt shrank by 0.24% month-on-month, notwithstanding its exponential year-on-year increase of 15.47% to $26.35 billion. The share of domestic debt rose to 57.81% of gross public debt as at end of October, with that of external debt narrowing to 42.19% Net public debt, which factors out public sector deposits, came in 8.50% higher on a yearly basis at $52.50 billion. The chart below unveils a 5.24% compounded annual growth rate in Lebanon’s net public debt over the October 2006 – October 2013 period.

Weekly Market Watch


PPUU

BBLL II CC

FFII NN

AANN

CCEE

October-2012 October-2013Y-O-Y % Change

Gross Public Debt 56.64 62.44 10.24% Domestic Debt 33.82 36.09 6.72% External Debt 22.82 26.35 15.47%Public Sector Deposits 8.26 9.94 20.43%

Net Public Debt 48.38 52.50 8.50%

Public Debt (USD Billion)

Source: The Association of Banks in Lebanon, Credit Libanais Economic Research Unit

Domestic Debt

57.81%

External Debt

42.19%

Composition of Gross Public Debt as at End of October 2013


0.00

10.00

20.00

30.00

40.00

50.00

60.00

Oct-2006

Oct-2007

Oct-2008

Oct-2009

Oct-2010

Oct-2011

Oct-2012

Oct-2013

36.7138.70

40.7443.73

44.91 45.8348.38

52.50

Billions of USD

Evolution of Net Public Debt


FFII XX

EEDD

II NNCCOO

MMEE

FIXED INCOME

The Lebanese Eurobond market was marked by another week of tamed activity amid the sustained bickering in North Lebanon. In figures, Lebanon’s five-year credit default swap settled at 390 basis points (bps), with static spreads easing to 399.35 bps.

Weekly Market Watch

SOURCE: CREDIT LIBANAIS CAPITAL MARKETS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 14

Lebanese Eurobonds Currency Coupon Maturity Bid Ask Bid YieldBid Static

Spread

Republic of Lebanon USD 7.375% Apr-14 101.31 101.48 3.500% 327

Republic of Lebanon USD 9.000% May-14 102.13 102.33 3.500% 326

Republic of Lebanon USD 5.875% Jan-15 101.77 102.10 4.200% 393

Banque Du Liban USD 10.000% Apr-15 107.25 108.25 4.490% 421

Republic of Lebanon USD 8.500% Aug-15 106.14 106.96 4.600% 428

Republic of Lebanon USD 8.500% Jan-16 107.50 108.50 4.720% 432


Republic of Lebanon USD 4.750% Nov-16 99.25 100.25 5.030% 440

Republic of Lebanon USD 4.000% Dec-17 98.50 100.00 4.410% 330

Republic of Lebanon USD 9.000% Mar-17 111.50 112.50 5.140% 439

Republic of Lebanon USD 5.000% Oct-17 98.38 99.38 5.470% 447





Republic of Lebanon USD 6.375% Mar-20 101.63 102.63 6.060% 415

Republic of Lebanon USD 8.250% Apr-21 111.50 112.50 6.270% 410

Republic of Lebanon USD 6.100% Oct-22 97.50 98.50 6.480% 393Republic of Lebanon USD 6.000% Jan-23 96.13 97.13 6.570% 396

Republic of Lebanon USD 7.000% Dec-24 102.00 103.00 6.740% 389

Republic of Lebanon USD 6.250% Jun-25 96.00 97.00 6.760% 382


Republic of Lebanon USD 6.750% Nov-27 98.50 99.50 6.920% 378Source: Credit Libanais Capital Markets

LEBANESE EUROBONDS

Government Eurobonds

LLEEBBAANN

EESSEE EE

QQUU

II TTII EE

SS

Weekly Market Watch


LEBANESE EQUITIES

Activity on the Beirut Stock Exchange was relatively dull this week, clawed by the recent violent clashes in the northern city of Tripoli. In fact, the number of shares changing hands fell to 196,641, down from 411,773 shares last week, with value traded receding to $3.42 million from $4.60 million a week before. Solidere “A” shares amassed the lion’s share (28.44%) of weekly trades for the third week in a row, with a total of 55,924 stocks traded on a thin turnover ratio of 0.06%. This week’s average daily trading value narrowed to $0.68 million, from $0.92 million last week. Similarly, the average daily trading volume slipped to 39,328 shares, down from 82,355 shares in the previous week. The Credit Libanais Aggregate Stock Index (“CLASI”) prolonged its downturn for the third consecutive week, shedding 0.68% to 1,008.07. Market capitalization also fell by 0.57% week-on-week to $10.57 billion, dragged by the contraction in the prices of four listed stocks, which outweighed the appreciation in the prices of three others. In the real estate sector, Solidere “A” ended the week on a negative note, closing 0.71% lower at $11.26, with Solidere “B” losing some 1.40% to $11.28. Consequently, the Credit Libanais Construction Sector Stock Index (“CLCI”) bucked its upturn to settle 0.75% lower at 617.58. In the banking sector, the Credit Libanais Financial Sector Stock Index (“CLFI”) prolonged its losing streak, suffering a 0.67% contraction this week on the back of the 1.27% drop in the price of the Bank Audi Listed Shares to $6.21, coupled with some 1.90% correction in the price of the Byblos Bank Listed Shares to $1.55.

Credit Libanais Previous Closing WeeklyIndices 29-Nov-2013 6-Dec-2013 % ChangeCredit Libanais Aggregate StockIndex <.CLASI> 1,015.02 1,008.07 -0.68%

Credit Libanais Financial SectorStock Index <.CLFI>

1,267.87 1,259.39 -0.67%

Credit Libanais ConstructionSector Stock Index <.CLCI> 622.22 617.58 -0.75%

Source: Credit Libanais Economic Research Unit

.CLASI Credit Libanais Aggregate Stock Index

Value Daily % Chng Daily Net Chng

1,008.07 -0.630% -6.39

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

1,085.93 19-Apr-13 981.97 19-Sep-13

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

1,801.01 7-Jul-08 836.11 25-Mar-09

Friday, December 06, 2013

600

700

800

900

1,000

1,100

1,200

06-D

ec-

12

27-J

an-1

3

20-M

ar-

13

11-M

ay-

13

02-J

ul-

13

23-A

ug-1

3

14-O

ct-1

3

05-D

ec-

13

Ind

ex V

alu

e

Credit Libanais Aggregate Stock IndexWeekly Performance

CLASI

CLASI 0.68%

600

700

800

900

1,000

1,100

1,200

1,300

1,400

06-D

ec-

12

27-

Jan-

13

20-

Mar

-13

11-

May

-13

02-J

ul-

13

23-A

ug-1

3

14-O

ct-1

3

05-D

ec-

13

Ind

ex V

alu

e

Credit Libanais Financial Sector Stock IndexWeekly Performance

CLFI

CLFI 0.67%

600

620

640

660

680

700

720

740

760

06-D

ec-

12

27-J

an-1

3

20-M

ar-1

3

11-M

ay-1

3

02-J

ul-1

3

23-A

ug-1

3

14-O

ct-1

3

05-D

ec-

13

Ind

ex V

alu

e

Credit Libanais Construction Sector Stock IndexWeekly Performance

CLCI

CLCI 0.75%

LLEEBBAANN

EESSEE EE

QQUU

II TTII EE

SS

The weighted average price to earning (P/E) and price to book (P/BV) multiples of the Beirut Bourse settled lower this week at 7.73x and 1.014x on a respective basis.

Weekly Market Watch


Weekly Weekly Weekly Total Market YTD Price

%Change Volume Value Listed Capitalisation P/E P/BV Perf.

Traded Traded Shares ($000)Solidere A $11.26 -0.71% 55,924 $628,968 100,000,000 $1,126,000 10.20 1.07 -13.38%Solidere B $11.28 -1.40% 34,302 $384,525 65,000,000 $733,200 10.21 1.07 -12.76%BLC Bank $1.95 0.00% - - 51,033,333 $99,515 8.86 1.30 7.73%-BLC Bank Preferred Class "A" $100.00 0.00% - - 400,000 $40,000 n.a n.a -1.96%BLC Bank Preferred Class "B" $100.00 0.00% - - 550,000 $55,000 n.a n.a -1.96%BLC Bank Preferred Class "C" $100.00 0.00% - - 350,000 $35,000 n.a n.a 0.00%Bank Audi - Listed Shares $6.21 -1.27% 40,560 $252,691 349,749,204 $2,171,943 6.15 1.00 1.97%Bank Audi GDR $6.73 0.00% - - 102,017,651 $686,579 6.66 1.08 7.00%-Bank Audi Preferred "E" $102.50 0.00% 1,160 $118,900 1,250,000 $128,125 n.a n.a 2.50%Bank Audi Preferred "F" $102.50 0.00% - - 1,500,000 $153,750 n.a n.a 2.50%-Bank Audi Preferred "G" $100.00 0.00% 2,760 $276,000 1,500,000 $150,000 n.a n.a 0.00%Bank Audi Preferred "H" $100.00 0.00% - - 750,000 $75,000 n.a n.a 0.00%Bank Of Beirut - Listed Shares $19.00 0.00% - - 16,822,467 $319,627 11.66 1.60 0.00%-Bank Of Beirut Preferred "E" $26.00 0.00% 8,000 $208,000 2,400,000 $62,400 n.a n.a 1.17%Bank Of Beirut Preferred "H" $26.00 0.00% 4,000 $104,000 5,400,000 $140,400 n.a n.a 0.00%Bank Of Beirut Preferred "I" $26.00 0.00% 6,000 $156,000 5,000,000 $130,000 n.a n.a 4.00%Byblos Bank - Listed Shares $1.55 -1.90% 27,500 $42,945 565,515,040 $876,548 7.38 0.75 -2.52%Byblos Bank Preferred Class 2008 $100.50 0.00% - - 2,000,000 $201,000 n.a n.a -1.18%-Byblos Bank Preferred Class 2009 $101.10 0.10% 5,190 $524,709 2,000,000 $202,200 n.a n.a -0.98%Byblos Bank GDR $73.00 0.00% - - 1,309,078 $95,563 6.95 0.71 4.29%-BEMO Bank - Listed Shares $1.84 0.00% - - 51,400,000 $94,576 20.44 1.20 -2.65%-BEMO Bank Preferred $100.50 0.50% 7,000 $704,600 200,000 $20,100 n.a n.a 0.50%BLOM Bank GDR $8.80 0.00% - - 73,896,010 $650,285 5.61 0.96 10.69%-BLOM Bank Listed Shares $8.25 0.00% 245 $2,021 215,000,000 $1,773,750 5.25 0.90 5.10%BLOM Bank Preferred Class 2011 $10.17 0.00% - - 20,000,000 $203,400 n.a n.a 0.00%-RYMCO Class "B" $3.50 0.00% - - 10,920,000 $38,220 28.71 1.80 32.58%-Holcim Liban $14.48 0.00% - - 19,516,040 $282,592 15.7 1.37 -8.06%-Ciment Blancs Bearer $3.25 12.07% 4,000 $12,988 6,000,000 $19,500 11.61 1.83 -0.31%Ciment Blancs Nominal $3.24 0.00% - - 3,000,000 $9,720 11.57 1.82 -1.82%-

Source: Beirut Stock Exchange, Credit Libanais Economic Research UnitNote: n.a stands for not applicable

Closing

Lebanese Equities

BEIRUT STOCK EXCHANGE

Previous Last % ChangeValue Traded ($) 4,595,587 3,416,347 -25.66%

Volume Traded 411,773 196,641 -52.25%

Average Daily Trading Value ($) 919,117 683,269 -25.66%

Average Daily Trading Volume 82,355 39,328 -52.25%Market Cap - BSE ($) 10,634,937,761 10,573,992,374 -0.57%Weighted Average P/E 7.783 7.733 -0.65%Weighted Average P/BV 1.020 1.014 -0.57%

Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit

Activity Analysis

Source: BSE, Credit Libanais Economic Research Unit

0

2

4

6

8

November 29, 2013 December 6, 2013

7.783 7.733

1.020 1.014

Evolution of Beirut Bourse Comparable Benchmarks

P/E P/BV

Weekly Market Watch

SOURCE: BDL, ABL, IMF, MOF, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 17

LLEEBBAANN

OONN ’’ SS

MMAAII NN

II NNDD

II CCAATTOO

RRSS

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

M ACROECONOM IC INDICATORS

GDP ($ Billion) 18.84 20.26 20.40 20.69 22.42 24.35 26.54 28.40 28.83* 29.26* 29.84*

Real GDP Growth Rate 1.70% 7.50% 0.70% 1.40% 8.40% 8.60% 9.00% 7.00% 1.50% 1.50% 2.00%*

GDP Per Capita ($) 5,086 5,397 5,434 5,503 5,965 6,395* 6,881* 7,268* 7,283* 7,297* 7,347*

Net Foreign Direct Investment ($ Billion) 2.99 1.99 2.79 2.68 3.38 4.33 4.84 4.96 3.40 2.30 3.79

FDI/GDP Ratio 15.87% 9.84% 13.68% 12.96% 15.06% 17.78% 18.23% 17.46% 11.79% 7.86% 12.71%

INDUSTRY

Industrial Exports ($ Million) 1,087 1,467 1,667 1,738 2,361 2,994 2,645 3,291 3,520 2,952 2,422.9 (4)

Import of Industrial Machinery ($ Million) 109 142 137 130 163 188 199.13 227.15 238.60 288.12 243.8 (4)

TOURISM

Total Number of Tourists 1,015,793 1,278,469 1,139,524 1,062,635 1,017,072 1,332,551 1,851,081 2,167,989 1,655,051 1,365,845 891,079 (3)

Growth in Tax-Free Spending N.A N.A 2% -15% 17% 56% 13% 21% 10% -6% -6% (4)

REAL ESTATE

Value of Real Estate Transactions ($ Million) 2,882.6 2,883.0 3,295.9 3,120.3 4,174.8 6,443.7 6,958.4 9,478.8 8,841.0 9,175 6,893 (5)

Number of Real Estate Sales Transactions 47,118 50,582 50,057 49,051 65,681 80,018 83,465 94,202 82,984 74,569 55,794 (5)

Construction Permits (000 sqm) 7,196 7,719 7,928 7,532 7,919 14,281 11,509 15,187 13,980 12,362 8,746 (5)

Cement Delivery (000 tons) 2,704 2,729 3,040 3,423 3,945 4,219 4,897 5,227 5,550 5,309 4,215 (4)

TRANSPORTATION

Beirut Port: Freight Activity (000 Tons) 4,767 5,060 4,476 4,226 5,318 5,746 5,769 6,469 6,677 7,225 6,817 (5)

Beirut Airport: Number of Passengers (million) 2.72 3.2 3.18 2.74 3.41 3.87 4.74 5.55 5.65 5.96 5.35 (5)

FOREIGN TRADE

Imports ($ Million) 7,168 9,397 9,340 9,398 11,815 16,137 16,242 17,964 20,158 21,280 17,661 (5)

Exports ($ Million) 1,524 1,747 1,880 2,283 2,816 3,478 3,484 4,253 4,265 4,483 3,552 (5)

Trade Balance ($ Million) (5,644) (7,650) (7,460) (7,115) (8,999) (12,658) (12,758) (13,711) (15,893) (16,797) (14,109) (5)

BALANCE OF PAYM ENTS

Balance of Payments ($ Million) 3,385 168 747 2,792 2,037 3,460.60 7,899.00 3,325.20 (1,996) (1,537) (675) (4)

Foreign Assets ($ Billion) 12.18 11.48 11.66 12.97 12.39 19.73 28.30 30.85 32.24 35.74 35.49 (7)

PUBLIC FINANCE

Government Expenditures ($ Million) 7,027 6,992 6,768 7,880 8,350 9,922 11,388 11,336 11,675 13,321 10,316 (4)

Government Revenues ($ Million) 4,415 4,984 4,912 4,853 5,804 7,000 8,428 8,414 9,333 9,396 7,026 (4)

Budget Primary Deficit / Surplus ($ Million) 1,515 1,851 1,802 1,335 1,787 2,730 3,380 1,203 1,662 (110) (547) (4)

Total Deficit ($ Million) (2,612) (2,008) (1,856) (3,027) (2,546) (2,921) (2,960) (2,894) (2,342) (3,925) (3,290) (4)

Deficit / GDP Ratio 13.86% 9.91% 8.61% 14.63% 11.35% 10.10% 11.15% 10.19% 5.65% 8.74%

Debt Service / GDP Ratio 16.33% 12.43% 10.88% 13.47% 13.08% 12.16% 15.21% 14.52% 9.66% 8.50%

Net Public Debt ($ Billion) 31.36 32.98 34.76 37.42 39.02 41.50 44.11 45.01 46.35 49.12 52.50 (5)

Gross Public Debt/GDP Ratio 168.50% 167.00% 175.70% 179.90% 167.80% 162.50% 192.71% 185.17% 129.38% 128.49%

M ONETARY AGGREGATES & INFLATION

M4 ($ Billion) 46.63 49.63 51.59 56.08 63.56 72.58 87.08 97.31 103.5 110.0 115.38 (6)

(M2-M1) ($ Billion) 15.51 15.22 14.27 13.37 14.11 21.93 31.14 35.66 35.82 39.32 40.15 (6)

Monetization Level (M2/GDP Ratio) 87.90% 80.27% 74.24% 69.39% 65.76% 85.55% 128.88% 138.47% 96.01% 97.67%

change in CPI (%) 3.00% 1.70% -2.60% 5.60% 9.30% 6.36% 4.20% 6.19% 4.27% 4.68% 0.80%

BANKING SYSTEM

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

Number of Branches 809 799 825 830 847 860 885 912 948 962 971 (1)

Total Assets ($ Million) 59,895 67,786 70,325 76,179 82,255 94,255 115,250 128,925 140,576 151,883 160,633 (5)

Total Deposits ($ Million) 49,362 55,835 58,117 61,541 68,059 78,663 96,821 108,601 117,703 127,657 134,968 (5)

Loans to the Private Sector ($ Million) 14,929 15,934 16,230 17,201 20,425 25,039 28,374 34,929 39,375 43,452 46,500 (5)

Customer Loans/ Deposits 30.24% 28.54% 27.93% 27.95% 30.01% 31.83% 29.31% 32.16% 33.45% 34.04% 34.45%

Dollarization Rate 65.02% 68.78% 71.71% 75.16% 77.34% 69.57% 64.46% 63.24% 65.92% 64.82% 65.67%

Net Profit - After Tax ($ Million) 448 463 580 754 962 1,215 1,429 1,838 1,743 1,620 2,246 (4)

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 1,507.50 1,507.50 1,507.50

* Figures Reflect IM F Estimates

Recap of Lebanon's Major Indicators

(1) As At End of June, 2013, (2 ) As At End of July, 2013, (3) As At End of August, 2013, (4) As At End of September, 2013, (5) As At End of October, 2013, (6) As At November 21, 2013, (7 ) As At End o f November, 2013

LLEEBBAANN

OONN ’’ SS

RRAATTII NN

GGSS

Weekly Market Watch

SOURCE: S&P, MOODY’S, FITCH, CAPITAL INTELLIGENCE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 18

Rated Banks

Long Term Foreign Currency

Financial Strength

Outlook Long Term Foreign Currency

Outlook Long Term IDR

Outlook

Bank Audi-Saradar B1 D- Negative B Stable B Stable

BLOM Bank B1 D- Negative B Stable - -

Credit Libanais - - - B Stable - -

Byblos Bank B1 D- Negative B Stable B Stable

BBAC - - - B Stable - -

Fransabank - - - B Stable - -

Bank of Beirut B1 D- Negative - - - -Sources: M oody's Investors Service, Capital Intelligence, Fitch Ratings

Lebanese Banks' Latest Ratings

Capital Intelligence Moody's Investors Service Fitch Ratings

Rating Agency Tenor Rating

Long-Term B-

Short-Term B

M oody's Investors Service Ltd. Long-Term B1

Fitch IBCA Ltd. Long-Term B

Short-Term B

Source: M oody's Investors Service, Standard & Poor's, Fitch IBCA Ltd.

Negative

Standard & Poor's

Republic Of Lebanon Sovereign Ratings

Outlook

Negative

Stable

s

CONTACTS RESEARCH Fadlo I. Choueiri, CFA [email protected] 961-1-200 028 EXT: 235 Jad Abi Haidar [email protected] 961-1-200 028 EXT. 251 Joelle Samaha [email protected] 961-1-200 028 EXT. 232 Patrick Karawani [email protected] 961-1-200 028 EXT. 275 Christelle Mouawad [email protected] 961-1-200 028 EXT. 230

MONEY MARKETS DESK Robert Araman [email protected] 961-1-200 028 EXT. 116 FX DESK Christian Hajjar [email protected] 961-1-200 027 CAPITAL MARKETS DESK Gaith Mansour [email protected] 961-1-322 191

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.

CCOO

NNTTAACCTTSS

Weekly Market Watch

ECONOMIC RESEARCH UNIT - SOFIL CENTER, BEIRUT LEBANON - TEL: 01-200028/9 FAX: 01-326786 19

weekly market watch - credit libanais...weekly market watch economic research unit - sofil center,...

Documents