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WeeklyMarketWatch

IssueNo.521

October8th–October14th2016

LLEEBBAANNOONN NEWS

ECONOMIC INSIGHTS

> Twenty Six Lebanese Banks Emerge Among Top 150 Arab Banks in 2015 1

> Lebanon Has Received $1.22 Billion in Assistance by August 2016 2

> Value of Tax-Free Shopping Down by 10% YTD September 2016 3

> Lebanon Ranks Ninth in External Debt Returns YTD September 2016 4

> Cleared Checks Volume at 9.20 Million in Q3-2016 5 > Public Sector Salaries, Wages & Related Benefits Reach $0.23

Billion in January 2016 6 > New Car Sales Notch 2.03% Lower Y-O-Y by September 2016 7 > The Number of BIA Passengers Adds 5.94% Y-O-Y by August

2016 8 > Beirut Port Freight Activity Improves by 8.27% Y-O-Y by

September 2016 9 MONETARY PERFORMANCE

> Monetary Aggregates 10 > Money Markets 10 LEBANESE EQUITIES

> Lebanese Equities & Credit Libanais Indices 11

Lebanon's Economic & Financial Sector Indicators 13 Lebanon's Ratings 14

TWENTY SIX LEBANESE BANKS EMERGE AMONG TOP 150 ARAB BANKS IN 2015

Bank Audi topped the list of Lebanese banks and ranked 18th among the top 150 Arab banks in terms of balance sheet size in the year 2015 according to Al-Iktissad Wal-Aamal magazine, followed by BLOM Bank (rank: 28) and Fransabank (rank: 41). LEBANON HAS RECEIVED $1.22 BILLION IN ASSISTANCE BY AUGUST 2016

The OCHA highlighted that some $1.22 billion out of a total of $1.57 billion in funds available to support Lebanon have been distributed/committed by end of August 2016. VALUE OF TAX-FREE SHOPPING DOWN BY 10% YTD SEPTEMBER 2016

Global Blue published its quarterly “Insights into Tourist Spending” report conveying some 10% annual contraction in the value of tax-free shopping in Lebanon during the first nine months of 2016. LEBANON RANKS NINTH IN EXTERNAL DEBT RETURNS YTD SEPTEMBER 2016

The cumulative return on Lebanon’s external sovereign debt stood at 4.81% as at the end of the first nine months of 2016, poising the country to occupy the last place among 9 MENA countries included in Merrill Lynch’s report.

TABLE OF CONTENTS

Weekly Market Watch

ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231

"BDL" Banque Du Liban "ABL" Association of Banks in Lebanon "MOF" The Lebanese Ministry of

Finance "BOP" Balance of Payment "IMF" The International Monetary Fund "Moody's" Moody's Investors Service "BSE" Beirut Stock Exchange "GDRs" Global Depositary Receipts "M1" Currency in Circulation + Demand

Deposits in LBP "M2" M1 + Other Deposits in LBP "M3" M2 + Deposits in Foreign Currencies "M4" M3+ Treasury Bills Held By Non Banking System, Including Accrued

Interests "CPI" Consumer Price Index "PPI" Producer Price Index "CLASI" Credit Libanais Aggregate Stock Index "CLFI" Credit Libanais Financial Sector Stock Index

"CLCI" Credit Libanais Construction Sector Stock Index “EIU” Economist Intelligence Unit “EOY” End of Year "P/E" Price to Earnings Multiple "P/BV" Price to Book Multiple "YTD" Year To Date "YTD Price Performance" Yield to Date Price Appreciation

"Forex" Foreign Exchange "LBP" The Lebanese Pound "USD" The United States Dollar "Yen" The Japanese Yen "GBP" The British Pound/ Sterling Pound "CHF" The Swiss Franc "Y-O-Y" Year-On-Year "GDP" Gross Domestic Product "MENA" Middle East and North Africa

“LE” Livre Egyptienne – Egyptian Pound

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

SYNOPSIS OF TERMS

Weekly Market Watch

ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231

LEBANON NEWS

Weekly Market Watch

SOURCE: AL-IKTISSAD WAL-AAMAL MAGAZINE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 1

TWENTY SIX LEBANESE BANKS EMERGE AMONG TOP 150 ARAB BANKS IN 2015

Al-Iktissad Wal-Aamal, the leading business magazine in the Arab region, ranked in its October 2016 issue (Issue 442) the top 150 Arab banks in terms of their consolidated assets, shareholders’ equity, loans & advances, deposits, net profits, return on average assets (ROaA), and return on average equity (ROaE) based on their year 2015 audited financial statements. The article unveiled that the consolidated profits of the top 150 Arab banks rose by 6.83% in 2015 to nearly $40.40 billion despite the ongoing regional political and security turbulences and the drop in international oil prices. Concurrently, the combined equity and balance sheet of the top 150 Arab banks widened by 9.21% and 6.00% y-o-y to around $320.62 billion and $2.56 trillion respectively by end of 2015. The Qatar-based Qatar National Bank led yet again the list of the top 150 Arab banks in terms of consolidated balance sheet, which approached $147.89 billion (5.78% of top 150 Arab banks’ assets), with its equity surpassing the $16.77 billion mark (5.23% of top 150 Arab banks’ equity), loans & advances reaching $106.62 billion (7.57% of top 150 Arab banks’ lending portfolio), and deposits standing at $108.51 billion (6.21% of top 150 Arab banks’ deposits). Qatar National Bank also outperformed other regional banks in terms of profits, which firmed at $3.11 billion (7.70% of top 150 Arab banks’ profits). Al-Iktissad Wal-Aamal positioned Saudi Arabia’s National Commercial Bank ($119.70 billion in assets; 4.68% of top 150 banks’ assets) in the 2nd place in all covered balance sheet items in 2015, followed by the National Bank of Abu Dhabi in terms of assets ($110.69 billion; 4.33% of top 150 banks’ assets) and the UAE’s Emirates NBD with respect to shareholders’ equity ($14.80 billion; 4.61% of top 150 banks’ equity). Locally, Bank Audi topped the list of Lebanese banks and ranked 18th among the top 150 Arab banks in terms of balance sheet size, with its total assets reaching $42.23 billion at end of 2015, followed by BLOM Bank (total assets: $29.07 billion; rank: 28) and Fransabank (total assets: $19.98 billion; rank: 41). Bank Audi also outperformed its local peers in terms of shareholders’ equity ($3.29 billion; rank among top 150 Arab banks: 30), trailed by BLOM Bank (shareholders’ equity: $2.72 billion; rank: 36) and Bank of Beirut (shareholders’ equity: $2.00 billion; rank: 43). On the profitability front, BLOM Bank emerged as the best performer in the domestic banking sector and the 29th most profitable bank among the top 150 Arab banks in the year 2015, recording net profits of $404.23 million. Bank Audi and Bank of Beirut came in 2nd and 3rd respectively, while ranking 30th and 48th in the region in terms of their respective net profits. The details of the remaining banks that made it on the list are further elaborated in the table below:

$ Million Rank Share Of Total Equity $ Million Rank Share Of

Total Assets $ Million Rank Share Of Total Profits

Bank Audi 3,289.38 30 1.03% 42,227.16 18 1.65% 402.89 30 1.00%BLOM Bank 2,720.16 36 0.85% 29,065.67 28 1.14% 404.23 29 1.00%Bank Of Beirut 2,002.52 43 0.62% 16,140.75 47 0.63% 193.16 48 0.48%Byblos Bank 1,986.62 44 0.62% 19,849.58 42 0.78% 160.43 55 0.40%Fransabank 1,957.60 46 0.61% 19,979.85 41 0.78% 179.61 49 0.44%BankMed 1,518.12 53 0.47% 15,534.42 50 0.61% 139.16 63 0.34%Société Générale de Banque au Liban 1,259.03 61 0.39% 16,491.29 46 0.64% 169.64 54 0.42%Banque Libano-Française 1,099.99 66 0.34% 11,568.49 58 0.45% 104.04 71 0.26%Credit Libanais 838.91 77 0.26% 9,928.43 63 0.39% 69.58 79 0.17%Bank of Beirut & the Arab Countries 477.77 89 0.15% 6,080.45 78 0.24% 44.40 87 0.11%Intercontinental Bank of Lebanon 464.52 90 0.14% 5,669.60 83 0.22% 68.25 81 0.17%First National Bank 396.93 96 0.12% 4,122.33 91 0.16% 35.12 96 0.09%Lebanon & Gulf Bank 320.06 103 0.10% 3,571.67 97 0.14% 30.61 100 0.08%Creditbank 280.30 112 0.09% 3,321.19 101 0.13% 36.45 94 0.09%Emirates Lebanon Bank 276.99 113 0.09% 1,509.51 126 0.06% 8.88 126 0.02%Industry and Job Bank 194.83 131 0.06% 880.82 136 0.03% -3.92 144 -0.01%North Africa Commercial Bank 190.18 133 0.06% 970.78 131 0.04% 7.29 129 0.02%Middle East & Africa Bank 152.41 136 0.05% 1,675.17 122 0.07% 15.90 117 0.04%Fenicia Bank 147.11 138 0.05% 1,591.68 124 0.06% 12.59 119 0.03%Banque Bemo 134.52 139 0.04% 1,619.51 123 0.06% 13.39 118 0.03%Lebanese Swiss Bank 132.53 140 0.04% 1,750.05 119 0.07% 9.28 125 0.02%Syrian Lebanese Commercial Bank 117.29 142 0.04% 373.07 147 0.01% n.a. n.a. n.a.Bank of Egypt to Lebanon 104.70 143 0.03% 1,517.46 125 0.06% 7.02 130 0.02%The New Company of the Bank of Syria and Lebanon 102.05 144 0.03% 1,113.91 129 0.04% 5.96 132 0.01%Al-Mawarid Bank 101.39 145 0.03% 1,958.12 118 0.08% 6.36 131 0.02%Jammal Trust Bank 79.52 149 0.02% 962.16 132 0.04% 4.64 135 0.01%

Shareholders' Equity Assets Net ProfitsRanking of Lebanese Banks Among the Top 150 Arab Banks

Source: Al-Iktissad Wal-Aamal, Credit Libanais Economic Research Unit

LEBANON NEWS

Weekly Market Watch

SOURCE: OCHA, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 2

LEBANON HAS RECEIVED $1.22 BILLION IN ASSISTANCE BY AUGUST 2016

The Office of the Coordination of Humanitarian Affairs (OCHA) released its monthly “Humanitarian Bulletin” for the month of September which sheds light on Lebanon’s humanitarian and development needs. In details, the bulleting highlighted that out of a total of $1.57 billion in funds available to support Lebanon, some $1.22 billion have been distributed/committed by end of August 2016, the bulk of which ($979 million) were disbursed to United Nations agencies and non-governmental organizations under the Lebanon Crisis Response Plan (LCRP). Nevertheless, and notwithstanding the aforementioned efforts, poverty levels are still elevated and the humanitarian situation is perilous for many families. Furthermore, the UNHCR, WFP and UNICEF have conducted a “refugees’ overall economic vulnerability study which revealed that some 52% of the refugees are extremely poor and that around 70.5% of them live below the poverty line of $3.80 per day. The study also found out that the refugees’ overall economic vulnerability worsened and rose by an increment of 1.4% since the year 2015. In addition, and always according to the study, 34% of refugee population is considered to be food insecure in 2016 up from 23% in 2015. From another standpoint, school enrollment among Syrian refugee children has increased by 100% over the past two years, with a record high of 158,000 Syrian children being registered in Lebanese public schools for this upcoming school year, compared to 150,000 in the 2015-2016 school year and less than half of that number enrolled during the 2013-2014 school year. This figure, however, still lags behind the target of 200,000 Syrian children set by the Ministry of Education (MEHE). Similarly, the number of vulnerable Lebanese children enrolled in schools increased to circa 200,000 for this school year, yet remained lower than the 269,000 target set by the MEHE. Moreover, the UNHCR estimated that around 31,000 individuals (6,200 households) were expelled from Lebanon in the past six months, the bulk of whom were evicted from the Mount Lebanon (33%) and Bekaa (26%) regions. The report also referred to a study released by the International Labour Organization (ILO) and the American University of Beirut (AUB), which shed light on the precarious working conditions of the 250,000 domestic workers currently residing in Lebanon. In fact, the study showed that 40% of these workers are denied their monthly salary, 25% work more than 10 hours per day and that 57% of them are deprived of their right of one day leave per week.

LEBANON NEWS

Weekly Market Watch

SOURCE: GLOBAL BLUE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 3

VALUE OF TAX-FREE SHOPPING DOWN BY 10% YTD SEPTEMBER 2016

Global Blue, one of the world’s leaders in Tax Refund services, published its quarterly “Insights into Tourist Spending” report conveying some 10% annual contraction in the value of tax-free shopping in Lebanon during the first nine months of 2016. This drop owes to the sizeable contraction in spending by tourists from GCC countries in the light of the travel restrictions that were imposed earlier in the year. Moreover, and barring Syria, all covered countries reported annual drops in the value of their respective tax-free spending in Lebanon with Iraqi, Kuwaiti, and Qatari tourists all spending 21% less than last year with KSA tourist spending plunging by 20%, only to name a few. In terms of number of refund transactions, Kuwaiti witnessed the highest annual drop (31%), followed by Saudi Arabia (-22%), whereas only Syria witnessed an increase (6%) in the number of refund transactions. Overall, the number of refund transactions shed 13% annually during the first nine months of 2016. The lion’s share of spending goes jointly to Emirati and Saudi (14%) tourists followed by Egyptian and Jordanian (6%) tourists, as sketched in the chart below: As for the breakdown of spending by category, “Fashion & Clothing” articles accounted for 73% of total tourists’ spending by September, trailed, and by far, by “Watches & Jewelry” items (13%) and “Home & Garden” (4%) appliances. As far as the geographical distribution of spending is concerned, Beirut, which hosts most pertinent shopping malls and brands, amassed 79% of total tax-free spending during the first nine months of the current year, followed by the Metn (14.00%) and Baabda (3.00%) regions.

-55%

-45%

-35%

-25%

-15%

-5%

5%

15%

All

Cou

ntries

Sau

di A

rabi

a

UAE

Kuw

ait

Jord

an

Egyp

t

Fran

ce

Qat

ar

Syr

ia

Uni

ted

Sta

tes

Nig

eria

Oth

er C

ount

ries

Iraq

-13%

-22%

-11%

-31%

-12%-18%

-11%-16%

6%

-1%

-16%

-9%-16%

Annual Growth in Number of Refund TransactionsYTD September 2016

Source: Global Blue, Credit Libanais Economic Research Unit

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

All

Cou

ntries

Sau

di A

rabi

a

UAE

Kuw

ait

Jord

an

Egyp

t

Fran

ce

Qat

ar

Syr

ia

Uni

ted

Sta

tes

Nig

eria

Oth

er C

ount

ries

Iraq

-10%

-20%

-9%

-21%

-9%-13%

-5%

-21%

7%

-6%-10%

-5%

-21%

Annual Growth in Spending YTD September 2016

Source: Global Blue, Credit Libanais Economic Research Unit

Fashion & Clothing 73%Watches & Jewelry 13%Home & Garden 4%Department Stores 3%Souvenirs & Gifts 1%Consumer Electronics & Household Appliances 1%Others 4%Total 100%Source: Global Blue, Credit Libanais Economic Research Unit

Total Spending Distribution by Category YTD September 2016

Saudi Arabia14%

UAE14%

Kuwait5%

Egypt6%Jordan

6%

Other55%

Total Spending Distribution by Country of Residence YTD September 2016

Source: Global Blue, Credit Libanais Economic Research Unit

Beirut, 79.00%

Metn, 14.00%

Baabda, 3.00%

Others, 3.00%

Spending Distribution by Area YTD September 2016

Source: Global Blue, Credit Libanais Economic Research Unit

LEBANON NEWS

Weekly Market Watch

SOURCE: MERRILL LYNCH, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 4

LEBANON RANKS NINTH IN EXTERNAL DEBT RETURNS YTD SEPTEMBER 2016

According to the “High Yield & Emerging Market Profiles” report published by Merrill Lynch, the yield on Lebanon’s external debt stood at 0.30% during the month of September 2016 (down from 0.68% in August) with the cumulative return on the external sovereign debt reaching 4.81% as at the end of the first nine months of 2016 (up from 4.50% YTD August). This poises Lebanon to occupy the last place among 9 MENA countries included in the external debt EM sovereign bond index in terms of total yield, with Iraq topping the list enjoying a total return of 28.34% by September, followed by Egypt (14.87%) and Tunisia (14.18%), only to name a few. It is worth highlighting that these returns are not risk-adjusted, which explains the fact that countries with high sovereign returns are associated with high Option Adjusted Spreads (OAS) as sketched in the table below. When factoring-in all emerging economies in the Merrill Lynch index, however, Venezuela emerged as the best performer with a sovereign yield of 57.36%, while Belize suffered the worst performance (a negative yield of 17.76%). As far as Lebanon is concerned, its excess return reached 0.36% in September 2016, ranking eighth among surveyed MENA countries, noting that Iraq also recorded the highest excess return of 23.32% and the highest OAS of 794 bps. Furthermore, the report indicated that option adjusted spreads on Lebanon’s External Sovereign Debt expanded to 514 basis points (bps) by end of September up from 507 bps YTD August. In this perspective, the weight assigned to Lebanon in Merrill Lynch’s Emerging Markets’ external debt index remained flat at 2.80% by end of September, as captured in the following analysis:

Country Returns (%) MENA Rank OAS (bps) Excess Return (%) MENA Rank

Iraq 28.34 1 794 23.32 1

Egypt 14.87 2 474 9.39 3

Tunisia 14.18 3 452 9.53 2

Morocco 10.76 4 216 5.77 4

Bahrain 8.43 5 389 3.40 5

UAE 6.09 6 139 1.10 6

Turkey 5.90 7 309 0.04 9

Qatar 5.75 8 132 0.42 7

Lebanon 4.81 9 514 0.36 8Source: M errill Lynch, Credit Libanais Economic Research Unit

Total Return on Sovereign External Debt in MENA Countries YTD September 2016

Month of August 2016

Month of September

2016

YTD August

2016

YTD September 2016

Returns (%) 0.68 0.30 4.50 4.81

Excess Return (%) 1.23 0.23 0.13 0.36

Option Adjusted Spreads (bps) 507.0 514.0 - -

Lebanon's Weight in the Index (%) 2.80 2.80 - -Source: M errill Lynch, Credit Libanais Economic Research Unit

Lebanon's Sovereign External Debt

LEBANON NEWS

Weekly Market Watch

SOURCE: ABL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 5

CLEARED CHECKS VOLUME AT 9.20 MILLION IN Q3-2016

According to ABL statistics, the value of cleared checks fell to LBP 76,345 billion (distributed over 9,195,071 checks) by the end of the first three quarters of 2016, in comparison with LBP 78,146 billion (allocated over 9,265,965 checks) during that same period last year. Of the total value of cleared checks, 71.28% was denominated in foreign currency, versus 73.38% a year before. Concurrently, the value of returned checks shed LBP 92 billion (5.34%) on an annual basis to LBP 1,631 billion YTD September 2016, with the number of returned checks dropping by 2.35% y-o-y to 170,185. This is further illustrated in the section below: The number of returned checks expressed as a percentage of the total number of cleared checks eased to 1.85% by end of Q3-2016, from 1.88% a year earlier. Similarly, the value of returned checks, calculated as a percentage of the total cleared checks value, dropped to 2.14% as at the end of the first nine months of the current year, down from 2.20% in the same period last year.

Billion Number Billion Number Value Volume

Cleared Checks-LBP Denominated LBP 20,799 3,037,678 LBP 21,930 3,166,470 5.44% 4.24% Returned Checks-LBP Denominated LBP 317 49,879 LBP 380 49,392 19.87% -0.98%

Cleared Checks-Foreign Currency Denominated $38.03 6,228,287 $36.08 6,028,601 -5.11% -3.21%Returned Checks-Foreign Currency Denominated $0.93 124,399 $0.83 120,793 -10.92% -2.90%

Total Cleared Checks LBP 78,146 9,265,965 LBP 76,345 9,195,071 -2.30% -0.77%Total Returned Checks LBP 1,723 174,278 LBP 1,631 170,185 -5.34% -2.35%Source: Association of Banks in Lebanon, Credit Libanais Economic Research Unit

Cumulative Check Clearing Activity September 2015 September 2016 Y-O-Y % Change

LBP-Denominated,

28.72%

Foreign Currency-

Denominated, 71.28%

Breakdown of Clearing Activity by Value

Source: ABL, Credit Libanais Economic Research Unit

LBP-Denominated

34.44%Foreign Currency-

Denominated65.56%

Breakdown of Clearing Activity by Volume

Source: ABL, Credit Libanais Economic Research Unit

2.20%

1.52%

2.46%2.14%

1.73%

2.31%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

Total LBP FC

Returned Checks as a Percentage of Cleared Checks (Value)

YTD September 2015 YTD September 2016

Source: ABL, Credit Libanais Economic Research Unit

1.88%1.64%

2.00%1.85%

1.56%

2.00%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

Total LBP FC

Returned Checks as a Percentage of Cleared Checks (Number)

YTD September 2015 YTD September 2016

Source: ABL, Credit Libanais Economic Research Unit

LEBANON NEWS

Weekly Market Watch

SOURCE: MOF, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 6

PUBLIC SECTOR SALARIES, WAGES & RELATED BENEFITS REACH $0.23 BILLION IN JANUARY 2016

The Lebanese Ministry of Finance recently published its Article 13 Monthly Bulletin pertaining to the payments of public salaries, wages, and related benefits during the month of January 2016. Said payments constituted 49% of the government’s total primary spending during the first month of the year 2016. More particularly, salaries, wages, and related benefits can be broken down into three main constituents, namely basic salaries, indemnities, and allowances. According to the Ministry of Finance, the payments of salaries, wages & related benefits shed some 9.79% y-o-y to LBP 350 billion ($232.17 million) as at end of January 2016, down from LBP 388 billion ($257.38 million) during that same month in 2015. The aforementioned drop comes as a result of the 91.21% annual decrease in allowances to LBP 8 billion ($5.31 million), which outweighed the 5.20% y-o-y increase in basic salaries to LBP 283 billion ($187.73 million) coupled with some 466.67% hike in other benefits to LBP 34 billion ($22.55 million). On the other hand, indemnities remained unchanged at LBP 19 billion ($12.60 million). Basic salaries accounted for 82.27% of total public sector salaries & benefits during the first month of 2016, with the share of allowances and indemnities standing at 2.33% and 5.52% on a respective basis.

(USD million)

For the Month of Jan-15 Jan-16 Jan-15 Jan-16 Jan-15 Jan-16 Jan-15 Jan-16 Jan-15 Jan-16

Military Personnel, of which: 120.07 126.04 4.64 6.63 59.70 4.64 0.00 0.00 184.41 137.31

Army 75.62 79.60 2.65 3.32 45.77 1.33 0.00 0.00 124.05 83.58Internal Security Forces 34.49 35.82 1.33 1.33 9.29 1.99 0.00 0.00 45.11 39.80General Security Forces 7.96 8.62 0.00 0.00 3.98 0.66 0.00 0.00 11.94 9.95State Security Forces 1.99 1.99 0.00 1.33 0.66 0.66 0.00 0.00 3.32 4.64

Education Personnel 38.47 39.80 3.98 3.32 0.00 0.00 0.00 6.63 43.12 49.75

Civilian Personnel, of which: 19.90 21.89 3.32 3.32 0.66 0.00 3.98 1.99 27.86 27.20

Employees Cooperative 0.00 0.00 0.00 0.00 0.00 0.00 0.00 13.27 0.00 13.27Customs Salaries 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.99 1.99

Unclassified 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.65

Total 178.44 187.73 12.60 12.60 60.36 5.31 3.98 22.55 257.38 232.17

Cumulative Breakdown of Salaries, Wages & Related Benefits

Source: Lebanese Ministry of Finance, Credit Libanais Economic Research Unit

Other TotalBasic Salaries Indemnities Allowances

Basic Salaries69.87%

Indemnities4.94%

Allowances23.64%

Other1.56%

Breakdown of Salaries, Wages & Related Benefits in January 2015

Source: Ministry of Finance, Credit Libanais Economic Research Unit

Basic Salaries82.27%

Indemnities5.52%

Allowances2.33%

Other9.88%

Breakdown of Salaries, Wages & Related Benefits in January 2016

Source: Ministry of Finance, Credit Libanais Economic Research Unit

LEBANON NEWS

Weekly Market Watch

SOURCE: AIA, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 7

NEW CAR SALES NOTCH 2.03% LOWER Y-O-Y BY SEPTEMBER 2016

According to the monthly statistics published by the Automobile Importers Association (AIA), new car sales in Lebanon reached 3,017 vehicles during the month of September 2016, compared to 3,418 vehicles in August and 3,279 in September 2015. On a cumulative basis, new car sales fell by 2.03% y-o-y to 28,579 cars as at the end of the first nine months of 2016, down from 29,170 cars during that same period last year. This comes as a result of the 4.93% contraction in Japanese car sales to 10,713 vehicles, coupled with some 3.85% drop in the sales of European cars to 5,763 cars and some 0.44% slump in the sales of Korean cars to 9,983 vehicles, which altogether outweighed the 13.96% increase in the sales of American cars to 1,910 and the 2.44% hike in the sales of Chinese cars to 210 units. Japanese cars continued to control the lion’s share of new car sales in Lebanon, amassing alone 37.49% of total volume sales by end of September 2016, followed by Korean (34.93%), European (20.17%), American (6.68%), and Chinese (0.73%) cars. The Korean “KIA” brand recorded total unit sales of 5,658 cars by September 2016, enjoying the highest market share of 19.80%, followed by the Korean “Hyundai” (4,280 cars <14.98%>) and the Japanese “Toyota” (3,941 cars <13.79%>) brands, only to name a few.

Sept-2015 Sept-2016 % ChangeJapanese 11,268 10,713 -4.93%Korean 10,027 9,983 -0.44%European 5,994 5,763 -3.85%American 1,676 1,910 13.96%Chinese 205 210 2.44%Total 29,170 28,579 -2.03%

New Car Sales During the Nine-Month Period Ending

Source: AIA, Credit Libanais Economic Research Unit

Japanese, 37.49%

Korean, 34.93%

European , 20.17%

American, 6.68%

Chinese, 0.73%

Breakdown of New Car Sales up to September 2016

Source: AIA, Credit Libanais Economic Research Unit

- 1,000 2,000 3,000 4,000 5,000 6,000

KIA

Hyundai

Toyota

Nissan

Renault

Suzuki

Chevrolet

Mitsubishi

Mercedes

BMW

5,658

4,280

3,941

2,773

1,388 1,241

1,217 1,159

809 594

Top 10 New Car Sales Brands up to September 2016

Source: AIA, Credit Libanais Economic Research Unit

LEBANON NEWS

Weekly Market Watch

SOURCE: BIA, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 8

THE NUMBER OF BIA PASSENGERS ADDS 5.94% Y-O-Y BY AUGUST 2016

The number of passengers travelling via the Beirut International Airport (BIA) rose by 5.94% on an annual basis to 5,082,230 during the first eight months of 2016, up from 4,797,133 passengers during that same period last year. More specifically, the number of arriving travelers expanded by 7.74% y-o-y to 2,562,716, accompanied by some 4.49% increase in the number of departing travelers to 2,512,502. The number of transit travelers, on the other hand, plunged by 49.90% on a yearly basis to 7,012, whereas the number of flights inched 5.40% higher to 47,382. This is further sketched in the charts below:

Beirut InternationalAirport Aug-2015 Aug-2016 % ChangeTotal Passengers 4,797,133 5,082,230 5.94% o/w Arriving Passengers 2,378,511 2,562,716 7.74% o/w Departing Travelers 2,404,627 2,512,502 4.49% o/w Transit Travelers 13,995 7,012 -49.90%Number of Flights 44,955 47,382 5.40%Source: BIA, Credit Libanais Economic Research Unit

For the Eight-Month Period Ended

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Total Passengers ArrivingPassengers

DepartingTravelers

Transit Travelers

5,082,230

2,562,716 2,512,502

7,012

BIA's Passengers up to August 2016

Source: BIA, Credit Libanais Economic Research Unit

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

2007

2008

2009

2010

2011

2012

2013

2014

Aug-2015

2015

Aug-2016

3,326,433 3,869,607

4,985,499 5,552,746

5,653,969

5,960,414

6,264,368 6,569,469

4,797,133

7,240,388

5,082,230

BIA Total Passengers (Cumulative)

Source: BIA, Credit Libanais Economic Research Unit

LEBANON NEWS

Weekly Market Watch

SOURCE: BEIRUT PORT, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 9

BEIRUT PORT FREIGHT ACTIVITY IMPROVES BY 8.27% Y-O-Y BY SEPTEMBER 2016

Beirut Port freight activity slowed on a monthly basis in September to 668.1 thousand tons down from 762.5 thousand tons in August. On a cumulative basis, freight activity appreciated by 8.27% year-on-year to 6,600 thousand tons by September 2016 up from 6,096 thousand tons in the same period last year. In parallel, the number of vessels expanded by 16.96% annually to 1,552 by the end of third quarter of the year, from 1,327 vessels a year before, with the number of containers increasing by 0.27% to 861,172. In the same vein, the number of imported cars via the Beirut Port added 1,254 cars annually to 79,065, from 77,811 cars during the first three quarters of 2015. Consequently, Beirut Port revenues rose by 1.64% y-o-y to $180.43 million by September from $177.52 million in the same period a year earlier.

Sep-15 Sep-16 % ChangeFreight Activity (000 Tons) 6,096 6,600 8.27%Number of Vessels 1,327 1,552 16.96%Number of Imported Cars 77,811 79,065 1.61%Number of Containers 858,846 861,172 0.27%

Revenues ($ Million) 177.52 180.43 1.64%

For the Nine-Month Period EndingPort of BeirutIndicators

Source: Beirut Port, Credit Libanais Economic Research Unit

0

1000

2000

3000

4000

5000

6000

7000

September2012

September2013

September2014

September2015

September2016

5,340

6,178 6,277 6,0966,600

Thousand Tons

Evolution of Cumulative Freight Activity in Beirut Port

Source: Beirut Port, Credit Libanais Economic Research Unit

MONETARY AGGREGATES

All monetary aggregates ended the week of September 29, 2016 on a positive note. In fact, the overall money supply, “M4”, widened by LBP 520.71 billion on a weekly basis to LBP 205,395 billion despite the LBP 149 billion slump in the non-banking sector Treasury bills portfolio. In parallel, Lebanese-pound denominated deposits and currency in circulation, “M1”, soared by LBP 382.45 billion week-on-week to LBP 9,518 billion on the back of some LBP 405 billion hike in demand deposits, which outweighed the LBP 23 billion drop in money in circulation. Local currency term deposits, “M2”, also gained some LBP 442.17 billion on a weekly basis, and registered a 5.09% year-on-year increase to LBP 81,635 billion. Consequently, private sector term and saving deposits denominated in LBP (“M2- M1”) edged slightly higher to LBP 72,118 billion, with deposits denominated in foreign currencies (“M3–M2”) firming at LBP 112,876 billion. MONEY MARKETS

The October 6th Treasury bill auction raised LBP 243.461 billion ($161.50 million), compared to LBP 291.949 billion ($193.66 million) in the auction of the previous week.

Subscriptions were majority (49.70%) concentrated in the five-year to maturity T-bonds, followed by the one-year (27.87%) and three-month (22.43%) tenure bills.

Consequently, the weighted average yield on Lebanese Pound Treasury bills stood at 5.84% in the auction of October 6. The yields on the three-month, one-year, and five-year to maturity Treasury securities remained flat at 4.44%, 5.35%, and 6.74% respectively.

MONETARY PERFORMANCE

Weekly Market Watch

SOURCE: BDL, REUTERS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 10

3 Months

6 Months

12 Months

24 Months

36 Months

60 Months

84 Months

120 Months

180 Months

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

0 1 2 3 4 5 6 7 8 9 10

On The Run Yield Curve

Lebanese Treasury Bills 3 Months 6 Months 12 Months 24 Months 36 Months 60 Months 84 Months 120 Months 180 MonthsTreasury Yield 4.44% 4.99% 5.35% 5.84% 6.50% 6.74% 7.08% 7.46% 7.90%

Mone y Supply

LBP Billion

M1 9 ,13 5 9 ,5 18 4 .19 %

M2 8 1,19 3 8 1,6 3 5 0 .5 4 %

M3 19 3 ,8 4 1 19 4 ,5 11 0 .3 5 %

M4 2 0 4 ,8 7 4 2 0 5 ,3 9 5 0 .2 5 %

M2 - M1 7 2 ,0 5 8 7 2 ,118 0 .0 8 %

M3 - M2 112 ,6 4 8 112 ,8 7 6 0 .2 0 %Source: Banque Du Liban, Credit Libanais Economic Research Unit

Se pte mbe r 2 2 , 2 0 16 Se pte mbe r 2 9 , 2 0 16 % Cha nge

6,000

26,000

46,000

66,000

86,000

September22, 2016

September29, 2016

204,874 205,395193,841 194,511

Money Supply - LBP Billion -

M4 M3

Source: BDL, Credit Libanais Economic Research Unit

Lebanese Treasury Bills

Yield (%) Face Value (in billions

of LBP)

% of Total Face Value

3 Months 4.44% 54.613 22.43%12 Months 5.35% 67.846 27.87%60 Months 6.74% 121.002 49.70% Total 243.461 100.00%Source: Reuters , C redit Libanais Economic Research Unit

October 6, 2016

LEBANESE EQUITIES

Activity on the Beirut Stock Exchange returned back to its normal rhythm this week after several rounds of block trades in the previous weeks. In fact, the number of shares changing hands plunged to 134,790 shares, down from 8,967,902 shares last week, with value traded sinking to just below $1.31 million, from nearly $90.66 million a week before. The contribution of banking sector stocks of total weekly traded volume stood at 50.61% this week, compared to 98.75% last week. In parallel, the average daily trading volume fell to 33,698 shares this week, from 1,793,580 shares last week. Similarly, the average daily trading value narrowed to about $0.33 million, from $18.13 million a week earlier. Four gainers and five losers were spotted this week, lifting the Credit Libanais Aggregate Stock Index (“CLASI”) higher by a shy 0.02% to 1,094.23. The BSE’s market capitalization was up by 0.90% week-on-week to around $11.25 billion amid the new listing of 4 million Bank of Beirut Preferred Shares Series “K” having a market capitalization of $100 million. In the real estate sector, trades mainly comprised Solidere “A” and “B” shares (36.55% of total traded volume), with the price of Solidere “A” rising by 0.52% to $9.61 and that of Solidere “B” shedding 1.64% to $9.60. Consequently, the Credit Libanais Construction Sector Stock Index (“CLCI”) ended its week down by 0.42% at 541.53. In the banking sector, BLOM Bank listed shares amassed the highest concentration of trades (18.07% of total traded volume) on a thin turnover ratio of 0.01%. The Credit Libanais Financial Sector Stock Index (“CLFI”) inched 0.13% higher this week to 1,446.71 amid the 0.65% appreciation in the price of Bank Audi listed shares to $6.24, along with the 0.64% increase in the price of Bank Audi GDRs to $6.25 and the 1.84% hike in the price of Byblos Bank listed shares to $1.66, which altogether outweighed the 0.99% drop in the price of BLOM Bank listed shares to $10.00 and the 0.78% contraction in the price of BLOM Bank GDRs to $10.22.

LEBANESE EQUITIES

Weekly Market Watch

SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 11

Credit Libanais Week of Week of Weekly YTDIndices 7-Oct-16 14-Oct-16 % Change % ChangeCredit Libanais AggregateStock Index <.CLASI> 1,093.98 1,094.23 0.02% 2.47%

Credit Libanais FinancialSector Stock Index <.CLFI> 1,444.80 1,446.71 0.13% 4.35%

Credit Libanais ConstructionSector Stock Index <.CLCI> 543.80 541.53 -0.42% -4.47%

.CLASI Credit Libanais Aggregate Stock Index

Value Daily % Chng Daily Net Chng

1,094.23 0.472% 5.14

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

1,115.09 6-Apr-16 1,065.48 9-Mar-16

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

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

Friday, October 14, 2016

1,000

1,020

1,040

1,060

1,080

1,100

1,120

1,140

14-O

ct-1

5

05-D

ec-1

5

26-J

an-1

6

18-M

ar-1

6

09-M

ay-1

6

30-J

un-1

6

21-A

ug-1

6

12-O

ct-1

6

Ind

ex V

alu

e

Credit Libanais Aggregate Stock IndexWeekly Performance

CLASI

CLASI 0.02%

1,300

1,320

1,340

1,360

1,380

1,400

1,420

1,440

1,460

1,480

14-O

ct-1

5

05-D

ec-1

5

26-J

an-1

6

18-M

ar-1

6

09-M

ay-1

6

30-J

un-1

6

21-A

ug-1

6

12-O

ct-1

6

Ind

ex V

alu

e

Credit Libanais Financial Sector Stock IndexWeekly Performance

CLFI

CLFI 0.13%450

470

490

510

530

550

570

590

610

630

650

14-O

ct-1

5

05-D

ec-1

5

26-J

an-1

6

18-M

ar-1

6

09-M

ay-1

6

30-J

un-1

6

21-A

ug-1

6

12-O

ct-1

6

Ind

ex V

alu

e

Credit Libanais Construction Sector Stock IndexWeekly Performance

CLCI

CLCI 0.42%

The weighted average price to earnings (P/E) and price to book (P/BV) multiples of listed stocks reversed their upturn, ending their week lower at 9.212x and 0.885x respectively on Friday.

LEBANESE EQUITIES

Weekly Market Watch

SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 12

P/E P/BV

Solidere A $9.61 0.52% 33,170 24.61% $320,957 24.52% 100,000,000 $961,000 11.05 0.79 -13.11%Solidere B $9.60 -1.64% 16,097 11.94% $154,174 11.78% 65,000,000 $624,000 11.03 0.79 -13.28%BLC Bank $1.69 0.00% - - - - 51,033,333 $86,246 8.45 0.68 -0.59%BLC Bank Preferred Class "B" $100.00 0.00% 250 0.19% $25,000 1.91% 550,000 $55,000 n.a n.a -2.44%BLC Bank Preferred Class "C" $100.00 0.00% - - - - 350,000 $35,000 n.a n.a -0.99%Bank Audi - Listed Shares $6.24 0.65% 9,500 7.05% $59,025 4.51% 399,749,204 $2,494,435 6.18 0.88 3.14%Bank Audi GDR $6.25 0.64% 13,000 9.64% $81,160 6.20% 114,988,117 $718,676 6.19 0.88 4.17%Bank Audi Preferred "F" $100.50 0.00% - - - - 1,500,000 $150,750 n.a n.a -1.18%Bank Audi Preferred "G" $100.70 -1.08% 500 0.37% $50,340 3.85% 1,500,000 $151,050 n.a n.a -0.30%Bank Audi Preferred "H" $101.00 0.00% - - - - 750,000 $75,750 n.a n.a -0.49%Bank Of Beirut - Listed Shares $18.80 0.00% - - - - 17,746,417 $333,633 10.93 1.27 0.00%Bank Of Beirut Priority Shares 2014 $21.00 0.00% - - - - 4,762,000 $100,002 12.21 1.42 0.00%Bank Of Beirut Preferred "H" $25.00 0.00% - - - - 5,400,000 $135,000 n.a n.a -5.66%Bank Of Beirut Preferred "I" $26.00 0.00% - - - - 5,000,000 $130,000 n.a n.a -1.89%Bank Of Beirut Preferred "J" $26.00 0.00% - - - - 3,000,000 $78,000 n.a n.a 0.97%Bank Of Beirut Preferred "K" $25.00 0.00% 2,360 1.75% $59,000 4.51% 4,000,000 $100,000 n.a n.a 0.00%Byblos Bank - Listed Shares $1.66 1.84% 5,000 3.71% $8,198 0.63% 565,515,040 $938,755 9.22 0.77 3.11%Byblos Bank Preferred Class 2008 $101.00 0.00% - - - - 2,000,000 $202,000 n.a n.a -0.20%Byblos Bank Preferred Class 2009 $101.10 0.00% - - - - 2,000,000 $202,200 n.a n.a 0.50%Byblos Bank GDR $80.00 0.00% - - - - 1,309,078 $104,726 8.89 0.74 0.00%BEMO Bank - Listed Shares $1.72 0.00% - - - - 51,400,000 $88,408 8.60 1.06 -9.47%BEMO Bank Preferred Class 2013 $100.00 0.00% - - - - 350,000 $35,000 n.a n.a 0.00%BLOM Bank GDR $10.22 -0.78% 13,250 9.83% $135,715 10.37% 73,896,010 $755,217 11.75 0.90 4.82%BLOM Bank Listed Shares $10.00 -0.99% 24,359 18.07% $243,626 18.61% 215,000,000 $2,150,000 11.49 0.88 6.38%BLOM Bank Preferred Class 2011 $10.00 0.00% 13,752 - $137,520 - 20,000,000 $200,000 n.a n.a -1.48%RYMCO Class "B" $3.25 0.00% - - - - 10,920,000 $35,490 14.13 1.67 0.62%Holcim Liban $14.37 -0.90% 2,118 1.57% $30,364 2.32% 19,516,040 $280,445 6.4 1.19 -1.03%Ciment Blancs Bearer $2.70 0.00% 1,434 1.06% $3,872 0.30% 6,000,000 $16,200 4.91 1.23 -30.77%Ciment Blancs Nominal $3.10 0.00% - - - - 3,000,000 $9,300 5.64 1.41 0.00%

YTD Price Perf.

Weekly Volume Traded

Lebanese Equities

BEIRUT STOCK EXCHANGE

Weekly Value Traded

Total Listed Shares

Weekly %Change

Closing

Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit

% of Weekly Volume Traded

% of Weekly Value Traded

Note: n.a stands for not applicable

Market Capitalisation

($000)

Previous Last % ChangeValue Traded ($) 90,659,910 1,308,950 -98.56%Volume Traded 8,967,902 134,790 -98.50%Average Daily Trading Value ($) 18,131,982 327,237 -98.20%Average Daily Trading Volume 1,793,580 33,698 -98.12%Market Cap - BSE ($) 11,145,727,482 11,246,283,660 0.90%Weighted Average P/E 9.238 9.212 -0.28%Weighted Average P/BV 0.886 0.885 -0.04%

Activity Analysis

Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit

Source: BSE, Credit Libanais Economic Research Unit

0

2

4

6

8

10

Oct 7, 2016 Oct 14, 2016

9.238 9.212

0.886 0.885

Evolution of Beirut Bourse Comparable Benchmarks

P/E P/BV

LEBANON’S MAIN INDICATORS

Weekly Market Watch

SOURCE: BDL, ABL, MOF, IMF, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 13

2 00 9 20 10 2 0 11 20 12 2 0 13 20 14 2 015 2 0 16

MACROECONOMIC INDICATORS

GDP ($ Billion) 35.14 38.01 40.08 44.10 47.60 49.94* 51.17* 52.80*

Real GDP Growth Rate 10.30% 8.00% 0.90% 2.80% 2.50% 2.00%* 1.00%* 1.00%*

GDP Per Capita ($) 8,274 8,756 9,144 9,966 10,655 11,073* 11,237* 11,484*

Net Foreign Direct Investment ($ Billion) 4.84 4.96 3.40 2.30 3.79

FDI/GDP Ratio 13.77% 13.05% 11.79% 7.86% 12.71%

INDUSTRY

Industrial Exports ($ Million) 2,595 3,291 3,530 2,952 3,076 3,150 2,956 1,301 (4)

Import of Industrial Machinery ($ Million) 199 227 239 288 300 269 234 131 (4)

TOURISM

Total Number of Tourists 1,851,081 2,167,989 1,655,051 1,365,845 1,274,362 1,354,647 1,517,927 955,813 (5)

Growth in Tax- Free Spending 13% 21% 10% - 6% 4% 8% 2% - 10% (8)

REAL ESTATE

Value of Real Estate Transactions ($ Million) 6,958 9,479 8,841 9,175 8,708 8,952 8,006 5,389 (6)

Number of Real Estate Sales Transactions 83,465 94,202 82,984 74,569 69,198 70,721 63,386 40,587 (6)

Construction Permits (000 sqm) 11,509 15,187 13,980 12,362 10,527 11,164 10,294 6,676 (6)

Cement Delivery (000 tons) 4,897 5,227 5,550 5,309 5,831 5,517 5,043 2,897 (5)

TRANSPORTATION

Beirut Port: Freight Activity (000 Tons) 5,769 6,469 6,677 7,225 8,268 8,281 7,240 6,600 (8)

Beirut Airport: Number of Passengers (million) 4.74 5.55 5.65 5.96 6.26 6.57 8.22 5.08 (6)

FOREIGN TRADE

Imports ($ Million) 16,242 17,964 20,158 21,280 21,228 20,494 18,069 12,792 (6)

Exports ($ Million) 3,484 4,253 4,265 4,483 3,936 3,313 2,952 1,974 (6)

Trade Balance ($ Million) (12,758) (13,711) (15,893) (16,797) (17,292) (17,181) (15,117) (10,818) (6)

BALANCE OF PAYMENTS

Net Foreign Assets at the Financial Sector ($ Million) 7,899 3,325 (1,996) (1,537) (1,127) (1,407) (3,354) (1,422) (5)

Foreign Assets ($ Billion) 28.30 30.85 32.24 35.74 35.29 37.86 37.09 40.60 (8)

PUBLIC FINANCE

Government Expenditures ($ Million) 11,388 11,336 11,675 13,321 13,640 13,952 13,528 7,273 (4)

Government Revenues ($ Million) 8,428 8,414 9,333 9,396 9,420 10,879 9,576 5,337 (4)

Budget Primary Defic it / Surplus ($ Million) 3,380 1,203 1,662 (110) (240) 1,307 724 495 (4)

Total Defic it ($ Million) (2,960) (2,894) (2,342) (3,925) (4,220) (3,073) (3,952) (1,936) (4)

Defic it / GDP Ratio 8.42% 7.61% 5.84% 8.90% 8.87% 6.14% 7.26%

Debt Service / GDP Ratio 11.49% 10.85% 9.99% 8.21% 7.96% 8.75% 8.60%

Net Public Debt ($ Billion) 44.11 45.01 46.35 49.12 53.18 57.30 61.54 63.54 (5)

Gross Public Debt/GDP Ratio 145.57% 138.39% 133.89% 130.80% 133.36% 133.28% 139.08%

MONETARY AGGREGATES & INFLATION

M4 ($ Billion) 87.08 97.31 103.50 110.00 117.41 124.53 131.17 136.25 (7)

(M2- M1) ($ Billion) 31.14 35.66 35.82 39.32 40.56 43.27 46.25 47.84 (7)

Monetization Level (M2/GDP Ratio) 97.35% 103.46% 99.32% 99.44% 95.68% 97.34% 101.74%

Change in CPI (%) 4.20% 6.19% 4.27% 4.68% 2.05% - 1.66% - 3.40% - 0.79% (6)

BANKING SYSTEM

Number of Commercial Banks 53 54 54 54 56 55 53 53 (1)

Number of Branches 885 912 948 962 985 1,020 1,039 1,039 (1)

Total Assets ($ Million) 115,250 128,925 140,576 151,883 164,821 175,697 185,989 190,927 (5)

Total Deposits ($ Million) 96,821 108,601 117,703 127,657 139,166 147,637 154,951 158,297 (5)

Loans to the Private Sector ($ Million) 28,374 34,929 39,375 43,452 47,381 50,899 54,224 56,067 (5)

Customer Loans/ Deposits 29.31% 32.16% 33.45% 34.04% 34.05% 34.48% 34.99% 35.42% (5)

Dollarization Rate 64.46% 63.24% 65.92% 64.82% 66.10% 65.71% 64.88% 64.87% (5)

Net Profit - After Tax ($ Million) 1,429 1,838 1,743 1,620

Exchange Rate (LBP to USD) 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50

* Figures Reflect IM F Estimates

(1) As at End of M arch, 2016, (2) As at End of April, 2016, (3) As at End of M ay, 2016, (4) As at End of June, 2016, (5) As at End of July, 2016, (6) As at End of August, 2016, (7) As at September 29, 2016

Recap of Lebanon's Major Indicators

(8) As at End of September, 2016

LEBANON’S RATINGS

Weekly Market Watch

SOURCE: S&P, MOODY’S, FITCH, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 14

Rating Agency Tenor Rating

Long- Te rm B-

Short- Te rm B

Moody's Inve stors Se rvic e Long- Te rm B2

Fitc h Ra tings Long- Te rm B-

Short- Te rm B-

Source: S&P Global Ratings, M oody's Investors Service, Fitch Ratings

Stable

S table

Ne ga tive

Republic Of Lebanon Sovereign Ratings

Outlook

Sta nda rd & Poor's Globa l Ra tings

Rated Banks

Long Term Foreign Currency

Financial Strength

Outlook Long Term

IDR

Outlook Long-Term Counterparty Credit Rating

Short-Term Counterparty Credit Rating

Outlook

Bank Audi B2 E+ Negative B- Stable B- C Stable

BLOM Bank B2 E+ Negative - - B- - Stable

Credit Libanais - - - - - - - -

Byblos Bank B2 E+ Negative B- Stable - - -

BBAC - - - - - - - -

Fransabank - - - - - - - -

BankMed - - - - - B- C Stable

S&P Global Ratings

Lebanese Banks' Latest Ratings

Moody's Investors Service Fitch Ratings

Sources: M oody's Investors Service, Fitch Ratings, S&P Global Ratings

CONTACTS

RESEARCH

Fadlo I. Choueiri, CFA

fchoueiri@cl.com.lb

961-1-608 000 EXT: 1280 Jad Abi Haidar, CFA jabihaidar@cl.com.lb 961-1-608 000 EXT. 1283

Joelle Samaha jsamaha@cl.com.lb 961-1-608 000 EXT. 1281 Mayda Zaarour mzaarour@cl.com.lb 961-1-608 000 EXT. 1282

MONEY MARKETS DESK

Robert Araman

raraman@cl.com.lb

961-1-608 000 EXT. 0760

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Weekly Market Watch

ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231 15