Lebanese Equities Weekly Market Report

Volume on the Beirut Stock Exchange dropped sharply from a week earlier, with investors sitting on the sidelines, with the advent of the francophonie summit, which was held in Beirut last week. Investors were hoping that the presence of the guest of ho nour, French President Chirac, will allow him and Prime Minister Hariri to discuss the details and setup a date for the long- awaited Paris II meeting.

This did not materialize, but both said that it will happen within weeks. Moreover, investors are closely watching local progress with respect to privatizing state-owned assets, which is expected to bring in cash to help control the public debt. 133,271 shares were seen trading on the BSE last week. Solidere shares accounted for 40% of the volume, while BLOM Bank and Bank of Beirut shares comprised 44% and 16% of total volume respectively. Solidere"A" and t heir "B" count erpart finished t he w eek unchanged at $4. 125 and $4. 625 respect ively. Bank of Beirut shares t raded wit h a volume of 20, 000 s hares, also closing unchanged at $7. 8125, w hile the BLOM Bank shares w ere t he only movers on t he ex change, rising 2. 24% to end at $17.125.

The Market Capitalization was nearly unchanged at $1.212 billion, up from $1.210 billion. Lebanon is placi ng it s effort s on privat izing st at e-ow ned assets, w hich should bring cash revenues t o t he government t o help it cont rol its mount ing public debt . The government w ill invit e bids t o privat ize two mobile t elecom netw orks wit hin days. It is also ex pect ed t o begin privat ising Liban Telecom, a new public company w orking on fix ed lines and a t hird cellular operat or, towards the end of next year. On a more global level, Lebanese GDRs are down 0. 85% as indicat ed by t he LI TSI index, w hile Arab GDRs were slight ly lower, dropping 0. 26% as invest ors sit on t he sidelines, w hile t hey monit or geopolit ical progress in t he Middle East .