brief iii 11 - 16 july, 2011 · title: microsoft word - brief iii 11 - 16 july, 2011 author:...
TRANSCRIPT
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Your Investment Reference
THE LEBANON BRIEF
ISSUE 732 Week of 11 – 16 July, 2011
ECONOMIC RESEARCH DEPARTMENT Rashid Karame Street, Verdun Area P.O.Box 11-1540 Beirut, Lebanon T (01) 991784/7 F (+961) 1 991732 [email protected]
www.blom.com.lb
S A L
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The Lebanon Brief Table Of Contents Page 2 of 14
ISSUE 732; Week of 11 – 16 July, 2011
S A L
TABLE OF CONTENTS
FINANCIAL MARKETS 3 Equity Market 3
Foreign Exchange Market 5
Money & Treasury Bills Markets 5
Eurobond Market 6
ECONOMIC STATISTICS & INDICATORS 7 Income Taxes Lift Fiscal Balance to Surplus 7
Cleared Checks at $34.12B in H1 2011 7
Trade Deficit Expands to $5.95B up to May 2011 8
Port of Beirut Activity Improved in H1 2011 9
ECONOMIC AND FINANCIAL NEWS 10 Govorner Riad Salameh’s Term Renewed 10
Beirut Hotel Occupancy Rate at 56.9% 10
CORPORATE DEVELOPMENTS 11 BLOM Bank to Issue Series 2011 Preferred Shares 11
FOCUS IN BRIEF 12 The Lebanese Transportation sector: Moderate Growth amid Poor Infrastructure and Legal Framework 12
This report is published for information purposes only. The information herein has been compiled from, or based upon sources we believe to be reliable, but we do not guarantee or accept responsibility for its completeness or accuracy. This document should not be construed as a solicitation to take part in any investment, or as constituting any representation or warranty on our part. The consequences of any action taken on the basis of information contained herein are solely the responsibility of the recipient.
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FE
The Lebanon Br
SSUE 732; Week
FINANCEquity Mark
Stock Mark
BLOM StockAvg Traded Avg Traded
*22 January 1996
Banking Se
BLOM (GDRBLOM ListedBLOM (GDRAudi (GDR) Audi Listed Audi (GDR) Byblos (C) Byblos (GDRBank of BeirBLC (C) Fransabank BEMO (C)
Banks’ PrefeShares IndeBEMO PrefeAudi Pref. DAudi Pref. E Byblos PrefeByblos PrefeBank of BeirBank of Beir
* 25 August 200
1300
1400
1500
1600
Jul-10
rief Financi
k of 11 – 16 July
CIAL Mket
et
k Index* Volume Value
6 = 1000
ctor
M
R) Bd B
R) LBB
BR) rut (C) B
B(B) O
B
Merred x *
erred 2006 BD B
Berred 08 Berred 09 Brut Pref. D Brut Pref. E B
6 = 100
Sep-10 N
BLOMHI:
ial Markets
y, 2011
MARKET
15/07/11 1320.34 181,099
2,664,110
Mkt 15/07
BSE $8.6BSE $8.4LSE $8.6BSE $7.3BSE $6.9LSE $7.2BSE $1.7LSE $84.0BSE $19.1BSE $1.8OTC $28.0BSE $2.7
Mkt 15/07/
$102.
BSE $100.BSE $10.1BSE $100.BSE $100.BSE $100.BSE $25.6BSE $25.7
Nov-10 Jan-1
M Stock Index1538.13
TS
08/07/111324.78102,813
1,249,675
/11 08/07/
68 $8.4646 $8.4863 $8.3535 $7.4097 $6.9425 $7.3974 $1.6900 $84.010 $19.1
87 $1.8700 $28.0
76 $2.76
/11 08/07/1
53 $102.5
00 $100.010 $10.1000 $100.010 $100.000 $100.060 $25.6075 $25.75
11 Mar-11
x
LO: 1
1 % Cha -0.34 76.145 113.18
/11 % Chan
6 2.60%8 -0.24%5 3.35%0 -0.68%4 0.43%9 -1.89%9 2.96%0 0.00%0 0.00%7 0.00%0 0.00%6 0.00%
11 % Chan
51 0.02%
00 0.00%0 0.00%00 0.00%00 0.10%00 0.00%0 0.00%5 0.00%
May-11 J
309.04
nge %
4% 8%
AlthobasisFridareapgoveThurinterEurotensdaysof thStocretre0.34on WThe 181,102,8weeon a FromStrenmeamovindicovera 14index2011miniloweindicthis yfor m The Pan 1.21perfodragtumbof EgTahrcounmovMoreEme1,13
nge
% % % % % % % % % % % %
nge
%
% % % % % % %
Jul-11
ough Lebaness, the markeay as investpointment of
ernor during sday. Stocksnational marpe’s debt ions in the M
s of the weekheir losses ok Index (BSI)
eated for the % to settle a
Wednesday, itdaily averag
099 shares 813 shares vk. The marke weekly basis
m a technical ngth Index (suring the ements. It o
cating an ovesold signal be4-day movingx breached th and continue
mum of 1,30est level sinccates an overyear after fluc
more than one
Lebanese beArab Compo% to 126 poormer amongged the abovbled 4.91% ogyptians haveir Square, co
ncil and Primeing fast eneover, the Brging index t5 points.
se equities reet recorded ators reactedf Riad Salam
the cabinets were tracrkets amid crisis and
MENA region dk before starton Thursday. ), Lebanon’s sixth consecat 1,320 pointts lowest clo
ge volume ofworth $2.6
valued at $1et capitalizatio to $9.67B.
analysis view(RSI) is a mspeed and
oscillates beerbought signelow 30. The
g average. Fohe low limit oed its downw
09 points on ce June 200rsold signal fctuating betwe month.
enchmark outosite LargeMioints. Egypt’sg emerging vementioned n a weekly b
e protested at omplaining thae Minister Esnough to im
BSI managed that retreated
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etreated on a a notable upt positively eh as Centra’s first sessking the slurising fears escalating p
during the firsing to recoveOverall, the main equity
cutive week, ts after hittingse since Junef trades jum66M compa.25M record
on dropped $3
wpoint, the Rmomentum os
change oftween 0 anal above 70 RSI is calculaor the BSI, ton the 28th o
ward trend to the 13th of J
09. Hence, tfor the seconeen the 30-70
tperformed thdCap Index ts EGX30, the
markets thisindex the moasis after tho the center of at the ruling ssam Sharaf mplement re to beat the
d 2.45% to s
3 of 14
weekly turn on to the
al Bank sion on ump in about political st three
er some BLOM gauge, edging
g 1,309 e 2009. ped to red to ed last 32.54M
Relative scillator f price d 100, and an ated on the RSI of June reach a July, its he RSI
nd time 0 bands
he S&P that fell e worst s year,
ost as it ousands Cairo’s military are not eforms. e MSCI ettle at
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M
F
R
T
The Lebanon Br
SSUE 732; Week
Real Estate
Solidere (A) Solidere (B) Solidere (GDR
Manufacturin
HOLCIM LibaCiments BlanCiments Blan
Funds
Beirut PreferrBLOM Cedars Fund Tranche BLOM Cedars Fund Tranche BLOM Cedars Fund Tranche
BLOM Bond F
Retail Sector
RYMCO ABC (New)
Tourism Sec
Casino Du LibSGHL
rief Financi
k of 11 – 16 July
M
BSBS
R) LS
ng Sector
M
n BScs (B) BScs (N) BS
Mred Fund BBalanced “A”
--
Balanced “B”
--
Balanced “C”
--
Fund --
r
MBSO
ctor
M
ban OTOT
ial Markets
y, 2011
Mkt 15/07/
SE $16.5SE $16.4SE $16.9
kt 15/07/
SE $16.0SE $3.07SE $1.55
Mkt 15/07/
BSE $103.5
---- $6,594
---- $5,164
---- $5,008
---- $10,010
Mkt 15/07/SE $2.70TC $16.5
Mkt 15/07/
TC $525.0TC $6.00
/11 08/07/
54 $16.942 $16.995 $16.8
11 08/07/
0 $16.07 $3.075 $1.55
/11 08/07/
50 $103.
4.61 $6,598
4.91 $5,168
8.66 $5,011
0.08 $9,997
/11 08/07/0 $2.7050 $16.5
/11 08/07/
00 $525.00 $6.00
/11 % Cha
98 -2.5991 -2.9081 0.83
/11 % Cha
06 -0.377 0.00%5 0.00%
/11 % Cha
50 0.00
8.60 -0.06
8.29 -0.07
1.68 -0.06
7.92 0.12
/11 % Chan0 0.00%50 0.00%
/11 % Chan
00 0.00%0 0.00%
ange
9% 0% %
The rthis valueto $1to $Solid
ange
% % %
In thBankcompthe advaJune$8.46to $7to $6to ensinceindexas Byto $1to $8
ange
%
6%
7%
6%
%
With Liban LookFridaRiad comibank
nge % %
nge
% %
real estate seweek, accou
e traded. Solid6.54, while So16.42. On tere GDR adde
he banking sking Index (Bpared to a 0.
regional banced 2.6% to 27, while BL6. As for Aud7.35, whereas6.97. Byblos cnd the week ae June 21. As x (BPSI), it incyblos Preferre100.10. In Lon8.63, while Au
respect to n lost 0.37% t
ing ahead, thy following t Salameh is ng weeks aming mid-year r
ector capturedunting for 85dere class “Aolidere class “the London ed 0.83% to $
sector, the MBI Lebanon.1% decreaseanking stocko $8.68, its hiLOM listed sti Bank, its GD
s its listed stcommon stoc
at $1.74, its hi for the BLOM
ched 0.02% ued stock classndon, BLOM di GDR lost 1
the industriato close at $16
he rebound the reappointmexpected to
mid expectatiresults.
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S A L
d the bulk of t5.5% of the A” dropped 2.“B” declined 2Stock Excha
$16.95.
BLOM Leban) rose by 0.e in the BMBks. BLOM ighest close sock lost 0.24DR slipped 0.ock added 0.ck jumped 2.ghest record
M preferred shp to 102.53 p
s 2008 rose 0. GDR rose 3..89% to $7.25
al sector, Ho6.
that was seement of Gove
o continue inons of prom
4 of 14
trade total
.59% 2.9% ange,
nese .24%
BI for GDR
since % to .68% .43% .96% level hares oints .10% .35% 5.
olcim
n on ernor
n the ising
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The Lebanon Br
SSUE 732; Week
Foreign ExLebanese F
Dollar / LP Euro / LP Swiss FrancYen / LP Sterling / LPNEER Index
*Close of GMT 0**Nominal Effec**The unadjustemajor currenciesthe approximate
Nominal Eff
Money & Tre
Money Mar
Treasury Yi
3-M TB yield
6-M TB yield
12-M TB yie
24-M TB cou
36-M TB cou
60-M TB cou
Overnight InBDL 45-d
BDL 60-d
90.00
92.00
94.00
96.00
98.00
Jul-10
rief Financi
k of 11 – 16 July
xchange MaForex Market
1
c / LP
P ** 09:00+2 ctive Exchange Raed weighted averas being traded wit relative price a co
fective Exch
easury Bills
rket Rates
ields
1
d
d
eld
upon
upon
upon
1
nterbank day CD
day CD
Sep-10 Nov-1
ial Markets
y, 2011
arket t 15/07/11 0
1507.50 12131.00 21844.71 119.02
2426.92 292.06
ate; Base Year Janage value of a couthin a pool of curronsumer will pay
ange Rate (N
s Markets
15/07/11 0
3.89%
4.40%
4.59%
5.34%
5.94%
6.18%
15/07/11 0
2.75%
3.57%
3.85%
0 Jan-11 Ma
08/07/11 %
1507.50 2156.03 -1775.20 18.53
2406.27 91.79
n 2006=100 ntry’s currency reencies. The NEER for an imported g
NEER)
08/07/11 Ch
3.89%
4.40%
4.59%
5.34%
5.94%
6.18%
8/07/11 Ch
2.75%
3.57%
3.85%
ar-11 May-11
%Change
0.00% -1.16% 3.92% 2.64% 0.86% 0.29%
elative to all R represents good.
Eb$tsbCspin
InschgooppE9
hange bps
0
0
0
0
0
0
hange bps
0
0
0
L(Lb2cL(lddtba
OLTtmw6aaaaaia
Jul-11
Excess demabetween Le$/LP1,514.5 whe Lebanese
sustained throbank (BdL) intCorrespondingstood at $29.8previous monncreased from
n internationastress tests ocapitalized lenhuge public dgovernment toof its latest auon Friday, the previous weekpound from Effective Exch92.06, reducin
Lebanon’s br$303.15M) dLP143,020B ($by 9.38% from2010. M1 procirculation anLP92B ($61.0excluding deifted by a Ldeposits denodeposits denothe dollarizatiobasis by 18bpat 2.75%.
On July 7, LP626.12B ($4The money cothe maturing mainly observwhich accoun6M and 3M pand 0.53% ofacross the maverage discoaverage coupoas previous aus worth mentaccepted bids
and for US banese ban
with a mid-price pound at tough foreign o the market,
gly, foreign as86 billion by nth, while thm 65.17% by t
al markets, tn banks this ders. This in
debt, estimateo pledge recoctioned papeEuro had dro
k, resulting in LP/€2156.03
hange Rate g its year to d
oad money during the w$94.87B). Conm June 2010 aogressed by d demand de3M) and LP3mand deposiP22B ($14.59
ominated in Lominated in foon rate of bros to 60.54%.T
2011 the M415.33M) throollected from
TBs of LP45ved on the hted for 66.53%
papers, they af total subscrmaturity curvount rate for on rate for 60uction at 3.89%tioning that th.
dollars kept nks stabilizece of $/LP1,5the upper limcurrency inje, to match thessets held by end June, 20
he dollarizatiothe end of Ap
the expected week shed lturn shifted f
ed at 130% oord-high borroers. Ahead of tpped 1.16% t the apprecia
3 to LP/€21(NEER) rebo
date decline to
aggregate Mweek ending nsequently, brand 2.86% froLP410B ($27eposits increa318B ($210.9its) also augm9M) increase Lebanese Pouoreign curren
oad money, it The overnight
Ministry of Fiough the issua the auction e53.27B ($300high yield lon% of total subaccounted resriptions. Durinve remained the 3M and M paper main%, 4.4% and he MoF conti
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S A L
the exchaned at $/LP512.5. The pomit of the pctions by thee demand for BdL (excludi
011, 0.3% lowon rate of dril to 66.45%
results of Eight on Italy’socus to the cof GDP – forcowing costs othe stress testo $/€1.4136 fation of the Le31.0. The unded by 0.o 2.52%.
M3 grew by June 30, 2road money adom end of De1.97M) as mased by a re95M). Total dmented by $ in term andnds and $17Mcies. With resdropped on at interbank rat
inance (MoFance of Treasuexceeded the 0.68M). Demang term papebscriptions. Asspectively for ng the auction unchanged 6M papers ntained the sa6.18% respecnued to unde
5 of 14
nge rate P1,510.5-sition of
peg was e Central r dollars. ng gold)
wer than deposits in May.
Europe’s s under-
country’s cing the on some st results from the ebanese Nominal 29% to
LP457B 2011 to dvanced ecember
money in spective deposits 31.59M,
d saving M rise in spect to a weekly te stood
) raised ury Bills. value of and was er (60M) s for the 32.94% n, yields
as the and the
ame rate ctively. It ertake all
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Dinro(bdinA Lcrr
The Lebanon Br
SSUE 732; Week
Eurobond M Eurobonds
Lebanese G
Maturi
2012, M2012, S2013, M2013, Ju2014, A2014, M2015, Ja2015, Au2016, Ja2016, M2017, M2018, N2020, M2021, A2022, O
2024, De• Mid P
Demand for mndex (BBI) 0.2esolution of t
of Europe’s obbps) to 5.00%demand was mndex that remAmerica, are d
Lebanon’s crecomparison Cegional econoespectively.
4.00%
4.50%
5.00%
5.50%
6.00%
Jul
Weig
rief Financi
k of 11 – 16 July
Market
Index and Y
BLOM BondWeighted YWeighted S*Base Year 20** The change
Government
ty - Coupon
Mar - 7.500% ep - 7.750%
Mar - 9.125% un - 8.625% pr - 7.375%
May - 9.000% an - 5.875% ug - 8.500% an - 8.500% ay - 11.625%
Mar - 9.000% Nov - 5.150% Mar - 6.375% pr - 8.250%
Oct - 6.100% ec - 7.000% Prices ; BLOMINV
medium and lo24% up to 11he US Fed to bstinate crisis%, the lowesmostly oriente
mained almosdenominated i
dit default swCDS quotes inomies, CDS q
l-10
ghted Effecti
ial Markets
y, 2011
Yield
d Index (BBI)* Yield** Spread*** 000 = 100; include is in basis point
Eurobonds
15/07/1Price*
103.0105.0108.7109.5109.0112.8103.5113.7114.5127.7116.797.75104.1117.099.13103.8
VEST bank
ong term pap0.48 points. T sustain its lows. Accordinglyt since Januaed towards dot flat over thein their respec
wap for 5 yearn Dubai climbquotes in Bra
Oct
ve Yield of E
des US$ sovereignts ***Again
1 *
08/07/Price
0 103.00 105.05 109.06 109.50 108.68 112.80 103.55 113.50 114.35 127.75 116.75 97.753 103.60 115.63 97.881 103.8
pers drove theThis investmew interest raty, the averageary 19, while ollar denomine week; keepctive local cur
s (CDS) was lbed to 338-3zil and Turke
t-10
urobonds
15/07/11 110.480 5.00%
374 n bonds traded onst US Treasuries
/11 *
WeekChange
00 0.00%00 0.00%00 -0.23%56 0.00%63 0.35%88 0.00%50 0.00%50 0.22%38 0.11%75 0.00%75 0.00%5 0.00%63 0.49%69 1.13%8 1.28%81 0.00%
e market for ent flow into Ee policy over e weighted yi the spread a
nated bonds, tping in mind trencies.
ast trading be358bps while ey widened to
Jan
08/07/11 110.219 5.06%
358 on the OTC markes (in basis points)
ly e%
1
% % % % % % % % % % % % % % % %
Lebanese EuEurobonds wathe short termeld on holdinagainst the Uthe BBI outpathat highly we
etween 340-36Saudi Arabia
o 114-120bps
n-11
Change 0.24%
-6 16
et
5/07/11 Yield
2.92% 3.22% 3.60% 3.44% 3.87% 4.06% 4.78% 4.72% 4.87% 5.05% 5.52% 5.53% 5.76% 5.92% 6.21% 6.57%
robonds this as instigated m, and a geneg Eurobonds
US benchmarkaced the JP Meighted bonds
67, up by an a’s quotes we and 186-193
Apr-
Year to Date-1.41%
44 85
08/07/11 Yield
3.05% 3.29% 3.51% 3.48% 4.03% 4.09% 4.78% 4.80% 4.91% 5.07% 5.52% 5.53% 5.84% 6.09% 6.37% 6.57%
week sendinby several fa
erally stronger thus contrack yield widen
Morgan emergs on the inde
average 4bps ere unchange
3bps from 105
-11
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S A L
Weekly Change bps
-13 -7 9 -4
-16 -3 0 -8 -4 -2 0 0 -8
-17 -16 0
g the BLOM ctors includinr dollar in the cted 6 basis pned to 374bpging markets’ ex, namely in
from last weed at 93-98bp5-110 and 175
Jul-
6 of 14
bond g the wake
points s. As bond Latin
ek. In ps. In 5-182
11
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The Lebanon Brief Economic Statistics & Indicators Page 7 of 14
ISSUE 732; Week of 11 – 16 July, 2011
S A L
ECONOMIC STATISTICS & INDICATORS Monthly Fiscal Balance in 2011
Source: Ministry of Finance
Income Taxes Lift Fiscal Balance to Surplus Lebanon’s budget balance unexpectedly recorded a monthly surplus of $183 million in May 2011 although the cumulative balance in the first five months of the year continued to register a deficit of LP 1,832 billion ($1.2B), 40.7% higher than the same period in 2010. The broadening gap in the fiscal balance during the period resulted from a 7.8% y-o-y increase in expenditures to LP 7,196 billion ($4.77B) and a 0.42% y-o-y decline in revenues to LP 5,363 billion ($3.56B). Government spending was boosted by a 76% jump in dues from previous years to LP 908 billion ($602.5M), and a 17.5% increase in Electricite du Liban (EdL) payments to LBP946 billion ($628M). However, interest payments on domestic and foreign currency denominated debt slid by 1.76% to LP 2,418 billion ($1.6B) as the government used some of its deposits at the central bank to finance part of the deficit. On the revenues side, nontax proceeds dropped 37% to LBP 521 billion ($345.8M) as the Telecom Ministry didn’t transfer any of its receipts to the Treasury this year, while LP 331 billion ($220M) had been transferred between January and May 2010. This was however balanced by a 6% increase in tax revenues to LP 4,542 billion ($3.01B). In details, customs dropped 22% to LP 877.8 billion ($582.3M) due to the removal of excise taxes on fuel imports and lower real estate and car registration fees, while taxes on profit, income and capital gains jumped 52% y-o-y to LP 1,540 billion ($980.5M). Following the improvement in May, Lebanon’s primary balance turned to a surplus of LP 713 billion ($473M) for the first five months of 2011 almost 42% below the surplus seen up till May in 2010.
Value of Cleared Checks
Source: ABL
Cleared Checks at $34.12B in H1 2011 The number of checks cleared by Banque du Liban rose by 1.19% to 6.35M worth $34.12B in the first half of 2011 compared to a total of 6.28M checks valued at $34.05B registered a year earlier. The value of checks denominated in foreign currencies declined by 2.13% to $26.94B, leading to a small drop in the dollarization rate of checks to 79.08% compared to 80.97% recorded in H1 2010. As for defaulted checks, their value climbed by 5.32% y-o-y to $792M, accounting for 2.32% of the total value of checks. For the month of June alone, the value of cleared checks rose by 2.65% from June 2010 to reach $5.87B. The value of checks denominated in foreign currencies, which represents 80.3% of the total, increased by 2.3% to $4.71B, while that of checks denominated in Lebanese pounds climbed by 4.12% to $1.16B.
-48.3
-501.1-548.3
-300.8
182.9
January February March April May
In millions of $
24,427 25,176
34,049 34,123
2008 2009 2010 2011
Up to June ($M)
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The Lebanon Brief Economic Statistics & Indicators Page 8 of 14
ISSUE 732; Week of 11 – 16 July, 2011
S A L
Trade Deficit
Source: Lebanese Customs
Imports and Exports
Up to May ($M)
Source: Lebanese Customs
Trade Deficit Expands to $5.95B up to May 2011 Lebanon’ trade deficit widened to $5.95B during the first five months of 2011, up by 10.19% from the same period in 2010. The change in the balance was the result of a 7.38% increase in imports to $7.66B and a simultaneous 1.27% drop in exports to $1.71M due to the influence of geopolitical turmoil and its effect on purchases of Lebanese products from the MENA region. Italy and USA constituted two major exporters to Lebanon up to May 2011, accounting for 10% and 9% of total imports respectively. China and France shared the third place with 8% each, while the fourth exporter to Lebanon was Germany with 6% of the total. Worth mentioning that the Euro denominated goods became less attractive following the Euro’s appreciation against the dollar-pegged local currency. In contrast, Lebanese imports from Egypt recorded a significant year-on-year surge of 73% to reach 4% of total imports, while imports from the UAE jumped by 50%. Greece and Japan however experienced 39% and 33% decline in their exports to Lebanon compared to last year. Mineral Products ranked first among imports up to May 2011 with $1.53B, followed by Machinery and mechanical appliances with $895M. On the export side, Lebanon exported the most to Switzerland that ranked first with a 10% stake, tracked by the UAE with 8%. Turkey raised its imports from Lebanon by 24% as opposed to last year, partly due to the Free Trade Agreement between the two countries and the cancellation of visa entry that promotes freedom of movement and encourages business ventures. Export of "unwrought gold, un-mounted diamond & precious stones" rose by 15% y-o-y to reach $559M, topping the list of exports and corresponding to 33% of the total. Excluding "unwrought gold, un-mounted diamond & precious stones", exports dropped by 8% following a 35% and 12% decline in exports of “boilers, machinery and mechanical appliances” and “electrical machinery and equipment” respectively. Lebanese customs revenues collected reached LP919B ($609.62M) in the first five months of 2011, recording a 21% drop from 2010’s level of LP1,157B ($767.5M). In the month of May alone, Lebanon’ trade deficit expanded 20.24% from May 2010 to $1.2B as imports climbed 15.27% to $1.58B and exports slipped 1.62% to $377M. Worth highlighting that re-export jumped 2507% y-o-y in May 2011 to $253M as it included military equipments amounting to $223,825,000 which exited Lebanon by the United Nations Emergency Force (UNIFIL) via re-export customs declarations while it entered Lebanon via political customs declarations that do not enter the statistics, as posted by the Lebanese customs.
4.69 4.84
5.40
5.95
2008 2009 2010 2011
Up to May ($B)
1.711.731.441.42
7.667.13
6.286.11
2011201020092008
Exports Imports
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The Lebanon Brief Economic Statistics & Indicators Page 9 of 14
ISSUE 732; Week of 11 – 16 July, 2011
S A L
Number of Imported Vehicles through PoB
Source: Port of Beirut Authorities
Port of Beirut Activity Improved in H1 2011 Total container activity at the Port of Beirut (PoB) rose by 6.07% y-o-y in the first half of 2011 to reach 501,049 twenty-foot equivalent (TEU) compared to 472,381 TEU recorded a year earlier. This rise is mainly attributable to a sharp increase in transshipment activity that jumped by 21.96% to 211,495 TEU as transit shipping shifted from ports of neighboring countries following the escalation of political turmoil in the MENA region. Container activity (excluding transshipment) dropped by 3.13% y-o-y to 289,554 TEU, while the number of imported cars declined by 33.54% to 32,153 units. Merchandise activity through the port of Beirut retreated in H1 2011 as imported and exported merchandises decreased by 1.32% to 3.25M tons. The number of docked vessels reached 1,087, 7.57% lower than the 1,176 vessels that anchored during H1 2010. In June alone, the number of containers fell for the first time this year, declining by 8.3% to 88,057 TEU compared to 96,026 TEU registered in June 2010 as Transshipment activity tumbled by 14.12% to 35,600 TEU, while container activity (excluding transshipment) declined by 3.88% to 52,457 TEU. Imported and exported goods climbed by 10.94% to 614,400 tons after falling for four consecutive months, whereas the total number of imported cars continued its downward trend, plummeting by 39.92% to attain 5,110 vehicles. To note that Port of Beirut generated $78.56M in revenues up to June 2011, 2.58% lower than the $80.64M registered a year earlier.
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The Lebanon Brief Corporate Developments Page 11 of 14
ISSUE 732; Week of 11 – 16 July, 2011
S A L
CORPORATE DEVELOPMENTS BLOM Bank Financial Highlights
($M) 2010 2009 % ch.
Total Assets 22,336.1 20,719.0 7.81%
Customers' deposits 19,445.6 17,968.0 8.22%
Net loans & advances to Customers
5,174.14 4,016.00 28.84%
Total Equity 1,903.43 1,698.56 12.06%
Net Profit 330.71 293.20 12.79% Source: BLOM Bank
BLOM Bank to Issue Series 2011 Preferred Shares BLOM Bank S.A.L. has successfully completed the official subscription period for its new Series 2011 Non-Cumulative Perpetual Redeemable Preferred Shares and is set to issue the new stock on or about July 22, 2011. The outstanding value of the shares to be issued is equivalent to USD 200 million – 20 million shares, at a par value of $10 each. The new issuance has been placed through subsidiary Blominvest Bank to eligible investors, and is intended to be listed on the Beirut Stock Exchange later during the year, although the bank reserves the right not to do so. The new series issue will distribute every year perpetually an amount equivalent to 7% of the nominal value per annum should there be profits recorded in the prior financial year. Moreover, holders of the Series 2011 shares will have the right to subscribe to potential new issuances, pro rata to their holdings.
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The Lebanon Brief Focus In Brief Page 12 of 14
ISSUE 732; Week of 11 – 16 July, 2011
S A L
FOCUS IN BRIEF
The Lebanese Transportation sector: Moderate Growth amid Poor Infrastructure and Legal Framework Communications Services Output Ratio of Value added by Sector to GDP
The transportation sector is a minor contributor to the Lebanese economy, providing a mere value added1, averaging at $451 million over the past decade, the lowest after that of the energy and water supply sector. In terms of GDP, the value added of the sector stood at a low average of 2% over the considered period. In terms of trend movement, the sector improved over the past ten years, growing at a CAGR of 7% to reach $785 million in 2009. The expansion is considered mere as the value added in transportation sector to GDP remained constant, with no major improvement or demotion, fluctuating within the narrow range of 1.9% to 2.4%. The stationary of the sector, enabled through the deterioration of some other sectors, such as industry, and the improvement of others such as construction, echoes the lack of governmental investment to enhance the transportation system in Lebanon. However, this value added computed by the national account statistics unit seems to underestimate the weight of the sector in the GDP as it does not take into account the transportation of goods. It is solely composed of the transportation of passengers as shipping of goods would appear as output in the trade and the market service sectors. The inclusion of goods in the transportation sector’s value added would then require its removal from the latter sectors’ value added to avoid double counting. Thus, comprising goods in the transportation sector would not affect the final output or the Gross Domestic Product (GDP)2, nonetheless it will impact its composition. Hence, the output of the transportation sector, as measured through its value added, comprises road transport, and air transport – and others - of passengers. Excluding transport of goods, the value added underestimates the economic weight of the sector by about 70%3, or $535 million, a significant amount, but not enough to boost the economic position of transportation among other sectors. Transportation of passengers, accounting for a mere share of the total, is included under air transport –and others. Domestic transportation flows are of national, regional, and international significance, comprising shipments of goods and passengers movements. The infrastructure of the sector relies on three active groundworks. The first being the maritime system, includes four ports of very unequal importance. The port of Beirut, the most crucial in terms of quantity and the value of freight, is followed by the port of Tripoli. The port of Saida and the port of Sour, play a relatively minor and limited role. 1 As calculated by the Lebanese National Account 2 Plus lack of data on shipments 3 Of $785 million, the value added in transportation in 2009
0102030405060708090
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
road transportation sector output(in million)
air transportation- and others - sector output (in million)‐50%
0%
50%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Industry sectorAgriculture & Livestock sector Energy & Water supply sectorConstruction sectorTransport & Communications sectorMarket Services sector Trade sectorGovernment sector
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The Lebanon Brief Focus In Brief Page 13 of 14
ISSUE 732; Week of 11 – 16 July, 2011
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The aviation transport, the second mean of transportation, is enabled through Beirut International Airport (BIA), the only airport in Lebanon. It was redeveloped several times with the latest development plan extending from 1994 to 2002. The land transport, the third mean, embraces two corridors within the country. The first is the Coastal Highway which crosses Lebanon from its southern end to its northern end and expands entirely in a flat coastal strip. The corridor allows the connection Northern Lebanon-Syria-Turkey. The second regional land transport corridor, the Beirut Damascus International Highway, crosses Lebanon from its western borders to its eastern borders. This road is roughly mountainous with steep slopes and absence of climbing lanes to allow overtaking of slow making trucks, which render it a relatively low-speed facility. The regional road connections allowed by this second corridor are Lebanon-Syria-Iraq; and Lebanon-Syria-Jordan-Saudi Arabia-Gulf countries. A fourth mean of transportation, a rail network, existed before the war but was completely destroyed during the years of the conflict. The network covered hundreds of kilometers of coastal and inland links, and served both domestic and international destinations. The value added in the road transportation sector has been significantly higher than that in the air transportation sector. However, the gap has shrank over time, from the highs of fivefold in early 2000 to less than twofold in late 2000s, due to the higher pace of growth in air transport versus road transport. To put things into perspective, traffic on the coastal highway and the Beirut Damascus Highway is high. On the former road, traffic reaches more than 150,000 vehicles4 per day (2-way traffic), resulting in significant traffic congestion, while on the second it reaches more than 75,000 vehicles3 per day (2-way traffic). The air traffic at the Beirut International Airport (BIA) is hectic as well and has been designed to increase its capacity to handle 6 million passengers a year, with an ultimate capacity of 16 million by year 2035. The flow of passengers, comprising residents, tourists, and expatriates, is affected by internal as well as external factors. On the internal front, the economic and political situation stands as the major determinant of the level of activities. A better perceived economy along with promising political developments would boost people’s confidence, lead to more frequent traveling inside and outside the country, and hectic passengers flows on the Lebanese territory5. On the external front, factors such as lower commodities prices, along with a growing global economy, would boost tourism activity in Lebanon and consequently the value added of transportation as airfares and land travel costs would decline and more tourists would be able to afford traveling. Other factors such as a weaker dollar may boost the number of incomers from European countries. In 2001, the end of the economic slowdown and the revived economic and political environment has led to a 13% rise in tourists’ arrivals, which echoed partly into a 6.1% rise in the value added of transportation and a subsequent 10 percentage point increase in the share of the value added to GDP. Prices during the year were down, leading to a respective 2.7% and 14.1% real growth in road transportation and air transportation. Similarly, the eruption of war in 2006, led to a deterioration of the economy, perceived through a sharp 3.8% and 1.1% decline in road transportation and air transportation respective real growth. The imposed embargo has however led to 2.9% and 1.7% rise in the respective prices of outputs for both sectors. In 2008, the 9.3% economic growth following the Doha agreement and the political composure that prevailed brought confidence to the market, and led to a 31% rise in tourist arrivals, thus boosting the real growth of road and air transportation by a respective 4.4% and 11.8%. The sharp rise in oil prices that peaked around $142 in July boosted prices of the sectors by a respective 16.2% and 12%. The expansion witnessed echoed a 28% growth in value added of the transportation sector that set at $720 million. In 2009, the factors contributing to growth in the prior year persisted, boosting the value added of the sector by 9%. In terms of volume, road and air transportation sectors grew by a respective 6.4% and 0.4%, whereas prices continued to grow less sharply, rising by a respective 7.4% and 0.7%.
4 Data as of 2005 5 As well as higher level of imports
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The Lebanon Brief Focus In Brief Page 14 of 14
ISSUE 732; Week of 11 – 16 July, 2011
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On the regulatory framework front, the ministry of Public Works and Transport (MPWT) controls all three sub-sectors dealing with transportation activity, namely the land, aviation, and maritime systems. However, deregulation in the land passengers’ transport sub-sector has been almost total, leading to congestion, pollution, and numerous accidents6. As for land freight transport, it is more organized than land passengers’ transport, although still far from optimal. Regarding maritime transport, Lebanon is part of almost all International Maritime Organization (IMO) conventions and agreements. However, the national laws and regulations for maritime transport are very old and outdated thus, there is a crucial need to renew them and make them consistent with international laws. As for air transport, it is considered the most advanced in Lebanon when compared to the other transport sub-sectors. The Lebanese flag carrier (Middle East Airlines) has undergone restructuring, and modernized its aircraft fleet.
6 In light of the popular uprising in neighboring Syria, land travel to and from Lebanon has been restricted. In response, the transport ministry is currently considering the launching of charter flights between Amman and Beirut to accommodate heightened traffic between the two cities
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Your Investment Reference
S A L
Research Department: Marwan Mikhael [email protected] Malak Hawa [email protected] Walid Sayegh [email protected] Gaelle Khoury [email protected]