BEIRUT: The Lebanese market Thursday reacted calmly but cautiously to the release of the long-awaited indictment which named four suspects in the assassination of former Prime Minister Rafik Hariri.

Most economists and analysts interviewed by The Daily Star said the market and bankers were bracing themselves for the release of indictment and have even prepared themselves for the worst-case scenarios.

BLOM Stock Index rose by 0.23 percent Thursday as the total value of traded shares reached $1.73 million.

There were also no reports of strong demand for the U.S. dollar or attempts by depositors to convert their Lebanese pound accounts to the U.S. currency.

There was some concern that Lebanon may be slapped with damaging economic and financial sanctions if the government of Prime Minister Najib Mikati does not comply with U.N. Security Council Resolution 1757 which explicitly stipulates that Lebanon should cooperate fully and unconditionally with the Special International Tribunal for Lebanon.

“We have to monitor the situation in the medium and long-term before assessing if the indictment will have grave impact on the economy,” economist Ghazi Wazneh told The Daily Star.

But he admitted that some tourists may decide to cancel their trips to Lebanon with the release of indictment.

After the formation of the government, the number of arriving visitors to Rafik Hariri International Airport rose from 6,000 passengers a day to more than 13,000, according to the Civil Aviation officials.

Most of the five-star hotels in Beirut say more than 80 percent of the rooms have been booked by Arab tourists.

Wazneh stressed that Lebanese and foreign investors may decide to freeze all projects in Lebanon until the picture in Lebanon becomes clearer.

Mikati, a successful businessman with wide investments abroad, is viewed by many companies as a moderate political figure who is keen on steering Lebanon away from political turmoil and from open confrontation with the international community.

For this reason, economists and bankers feel confident that Mikati will be able to override most of the problems in a tactful and wise manner.

“I don’t think there will be a rush on the U.S. dollar. The market will relax when the Cabinet or Parliament renews the term of Central Bank Governor Riad Salameh,” Wazneh said.

He added that the international tribunal will try the suspects in absentia if the suspects are not handed over by the Lebanese authorities in 30 days.

“The trial of the suspects may drag on for years and by that time the Lebanese market will cope with the new situation,” the economist explained.

Former Finance Minister Jihad Azour told The Daily Star that it is too early to say what will happen in Lebanon in case the government fails to implement Resolution 1757. “No one can predict what will happen in the near future. But so far there are no indications that the economy is suffering as a result of the indictment,” Azour said.

He argued that if there are no security incidents in Lebanon, then the situation in the country will remain calm.

Other observes ruled out a repetition of the May 2008 incidents when Hezbollah fighters occupied west Beirut and other areas after the government of then-Prime Minister Fouad Siniora decided to dismantle all the landline networks of the party.

These observers even dismissed the possibility of U.N. sanctions on Lebanon if the suspects were not brought to justice.

One banker, who spoke on condition of anonymity, said most if not all commercial banks in Lebanon do not deal with Hezbollah.

“Banks are very careful these days to keep all their balance sheets clean. This means the bank will signal out any suspicious deal if the client is not a well known businessman,” the banker said.

Last week, Barclays Capital considered that the formation of the new Cabinet should in principle bring some positive momentum to the economy following consecutive months of deteriorating activity across various sectors.

It said the coincident indicator has been on a downward trend in the first quarter of the year, declining for the first time on a year-on-year basis in February and March since 2007. Also, real estate sales dropped by 21 percent year-on-year in the first four months of 2011, resulting in a severe slowdown in the real estate and construction sector. Further, tourism activity decelerated sharply and the growth of private sector credit slowed down.