|Lebanon's Solidere buys back stock in hopes of imminent price increase
|Source claims former premier behind recent acquisitions
The giant Lebanese real estate firm Solidere is aggressively buying back large quantities of its shares that are listed in the Beirut Stock Exchange in the hopes that the value of the properties in the Beirut Central District will shoot up in the near future, a broker said Friday.
"Solidere has bought more than two million shares since August of this year at a value of $16 million," said Fouad Tabbra, an investment adviser at the Arab Finance Corporation.
In November alone, over a million Solidere A shares were traded, at a value of $7.9 million. The share rose 12.86 percent to $8.25 during the month.
On Friday, trading investors bought 626,755 Solidere A shares at a value of $5.235 million. But insiders said that Solidere has acquired the bulk of these shares. The price of Solidere is currently traded at $8.40.
"Solidere is acquiring these shares as part of its buyback option which it started a few months ago," Tabbra said, adding that Lebanese and Arab investors are also buying Solidere shares in large quantities.
"Some of the holders of Solidere A shares are coming to our office to sell these shares while others are hoping to sell these stocks at more than $10 per share," he said.
Tabbra said he does not believe Solidere A shares will go beyond $10 in the near future.
"But if Lebanon manages to survive UN Resolution 1559 (which calls for the withdrawal of the Syrian Army and the disarmament of all militias), Solidere A shares may reach $12 or more," he added.
Holders of Solidere A shares are mostly owners of properties in the central district, which was developed by the company after the civil war.
The A shares were granted to some of the land owners when Solidere was created as part of a compensation package.
Solidere has dominated the bourse's activity in the first week of December, with 80.5 percent of total trades.
An informed source said that former Premier Rafik Hariri is actually the one who is buying Solidere A shares, through friends and acquaintances.
The source added that Hariri is apparently betting on a peace settlement in the Middle East and a change in the situation in Lebanon after the parliamentary elections in a few months.
Hariri, who founded Solidere in 1994, controls 7 percent of the company.
According to the company's law, an individual or a company is not allowed to control over 10 percent of Solidere's stock.
The Daily Star