Week 9 Economic Report - Lebanon

SURVEYS
p.4 MasterIndex displays stagnation in Lebanese consumers’ confidence
MasterCard Worldwide released the results of its biannual consumer confidence index survey, MasterIndex, for the second half of 2007, along with forecasts for the first half of 2008.

CORPORATE NEWS
p.5 Matelec builds €68 million power station in Senegal
Matelec, in charge of the Doumet Group’s electricity sector related activities, lately inaugurated a 67.5 MW capacity power station in Kounoune, Senegal.

Also in this issue:
p.5 Roadster Diner to expand into the UAE
p.5 Arope Insurance doubles its capital to LP 43.2 billion
p. Zain Saudi Arabia’s SR 7 billion IPO oversubscribed by 2.7 times

MARKETS IN BRIEF
p.6 The US Dollar on offer despite the local political impasse
The repeated failure of the Arab mediation efforts to resolve the Lebanese conundrum before the Arab summit is held at end-March, in addition to the persisting constitutional void and the absence of any positive outlook in the near future left negative spillovers on the market players’ sentiments. In fact, local interest in Lebanese equities lessened this week, while both local and foreign investors show no appetite to trade the Lebanese Eurobonds. In details, the Beirut Stock Exchange reported a weak activity this week, with the total trading value amounting to US$ 9 million versus US$ 13 million last week. The trading volume index fell by 35.7% week-on-week, while the price index retreated slightly by 0.8% to 145.20. On the Eurobond market, the average yield surged by 43 basis points due to the cancellation of a US$ 700 million sovereign bond maturing on March 12, and the total bond portfolio declined to US$ 15,986 million. The average spread widened by 65 basis points to 591 basis points due to the relevant increase in Lebanese yields and the drop in benchmark yields. On the other hand, a favorable mood continued to reign over the foreign exchange market. The US Dollar remained on offer at higher volumes relative to the previous week, which called for the Central Bank’s intervention as a buyer of the green currency surpluses at LP 1,512.5. It is worth mentioning that the Central Bank’s foreign assets rose by a CAGR of 3.66% from mid-February 2005 to mid-February 2008, which reflects the strong immunity of the monetary conditions against adverse local political and security developments.

--Source-- Bank Audi >> Full PDF


BLOM Week 9 - Lebanon Economic Report - Full PDF

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