|Lebanon bourse sees biggest gain in four months ahead of Mehlis report
|Lebanon's stock index leapt 3.09 percent yesterday, it's biggest gain in four months, as investors expressed optimism that a report on the killing of former Prime Minister Rafik Hariri will restore stability to the violence-scarred country.
The benchmark BLOM stock index climbed 30.32 to 1,011.80 yesterday, its first gain in three days. The Hariri-founded real estate giant Solidere led gains, closing at $13.50, up 5.46 percent. The company's "B" shares rose 4.06 percent to close at $13.30.
"There's a sort of apprehension about the Mehlis report and what it will say, but deep down we have a lot of confidence in the future of the country," Joe Sarrouh, adviser to the chairman of Lebanon's Fransabank, told The Daily Star. "This confidence is being met by good feelings from investors outside."
German prosecutor Detlev Mehlis is scheduled to deliver a report on Hariri's killing to UN chief Kofi Annan on Thursday.
Lebanon expects more that $4.4 billion in soft loans from the international community by the end of the year.
Bank shares rose yesterday, with Byblos Bank listed shares posting 1.52 percent gains to close at $2. The bank said Tuesday it is in the process of acquiring a 51 percent stake of a small Algerian bank in a deal estimated at $14 million. Shares of BLOM bank, Lebanon's largest in terms of assets, rose 0.86 percent to $49.04.
Lebanon's small and illiquid bourse, largely left out of dramatic gains in regional bourses, has recovered from a crisis in confidence after the murder of Hariri, which plunged Solidere shares to below $7.
"Foreign institutional investors, both from the Gulf and the West, are now investing in the stock market," said Nassib Ghobril, a Lebanese economist. "With reforms and the upcoming donor conference, people have a positive sentiment toward the Lebanese economy."
Investors expect Solidere shares to continue to fluctuate between $12.50 and $13.50.
"I think there's a lot of value in Solidere," Sarrouh said. "It's one of the biggest real estate projects and the whole region is awash with liquidity."
The Daily Star