BEIRUT: Despite earnings results, Beirut stocks remained both an unpopular trading choice for investors and a drag on portfolios during the first week of November. The BLOM Stock Index (BSI) added one more week to its nine-month legacy of decline in 2011, shedding 1.05 percent to 1,187.46 points during the five trading days ahead of Eid El Adha.
The break below the 1,200-points level effectively erases all the market’s gains following the June 2009 parliamentary elections and opens the door to further declines.
Volumes picked up slightly by 4.5 percent to 400,244 shares during the week, but instead of breathing life into the Beirut Stock Exchange (BSE), the marginal activity erased $100 million in market capitalization to close Friday at $10.38 billion.
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| Stocks held large volumes of sell orders relative to buy orders |
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Trailing the market was the exchange’s heavyweight stock Solidere A that tumbled 2.52 percent to $14.3 followed by Byblos Bank at 2.47 percent. At the start of the week, the latter reported an 8.6 percent year-over-year drop in net profit to $44 million in the third quarter of 2011, but said its nine-month performance remained 6.2 percent ahead of 2010.
Byblos Banks’ earnings, although not surprising given the slowdown in the domestic market and the turmoil in neighboring Syria where the bank maintains major operations, still disappointed some investors and by close of business Friday there were 2.6 times more sellers than buyers of Byblos Bank shares.
In fact, the majority of stocks held large volumes of sell orders relative to buy orders including Banque BEMO Bank which had 10,000 shares in line for a sale at 2 percent below the market price with no buy orders. On the other hand, bid-ask volumes of Solidere shares were balanced on the buy and sell side while investors were lined up to purchase Bank Audi and Ciment Blancs shares albeit at a discount to last prices.
On the other hand, bonds maintained their outperformance over local equities with the BLOM Bond Index rising 0.1 percent to close the week at 111.1 points. Similarly, Lebanese Eurobonds were up 1.2 percent in October with BofA Merrill Lynch returning to an Overweight view on the securities which comprise 3.6 percent of its model portfolio, the third largest holding after Russia and Turkey among 22 countries under coverage in the Eastern Europe, Middle East, and Africa region.