BEIRUT: Everybody and their brother has taken a shot at Beirut stocks in 2011. After the collapse of the national unity government in January, Arab uprisings, the row over the Special Tribunal for Lebanon, European debt concerns, and most recently U.S. recession fears, all of which have taken a punch at local stocks, the Beirut Stock Exchange is pinning its hopes on a strong comeback in the last quarter of 2011.

“I would expect stocks to continue their down trend in coming weeks, [but they] may rise again at the end of the year if companies report strong earnings results,” said Carole Sassine, chief broker at Credit Commercial et Foncier in an interview with The Daily Star.

Stocks typically lose momentum during the summer months, but with the start of the fall season, investors return to market and drive up volumes. Although the number of traded shares grew by half to 932,267 during the last week of September, “both volumes and prices were still lower than usual,” according to Sassine.

Indeed, the week brought little change for investors on the verge of despair from the seemingly endless road downhill. The Beirut Stock Index closed the week down 0.57 percent to 1,233.57 points on Sept. 30, slashing the exchange’s market capitalization by 0.6 percent to $10.65 billion.

Bank Audi’s listed and GDR shares led the fall with drops of 1.8 percent and 1.89 percent respectively as the distress in Syrian banking sector operations continued to irk investors. On the other hand, Solidere, the real estate developer of downtown Beirut, fell only 0.7 percent during the week as its class A and B shares closed the day Friday up over 1 percent to $15.18 and $15.06 respectively.

Sassine attributed recent weakness in Solidere and several bank shares to international and regional events, partly caused by regional investors holding back. “The decline in the past few weeks was largely in relation to international markets, not due to domestic events. Several of the BSE companies are listed on foreign markets and were affected by the slowdown in investor activity. We also have not seen much interest from foreign investors who are probably more concerned with problems at home,” explained Sassine.

However, Sassine still sees the domestic political framework as the structural reason for the nine months of decline. “Domestic investors are also not encouraged because they still have the same perception of political instability in Lebanon. Not all Lebanese are quite relaxed about the new government and the other party has in the past shown more confidence in financial markets,” said Sassine.

BSE stocks have withheld one of the region’s and world’s most nerve-wrecking nine months and emerged with a respectable 15 percent decline year-to-date. Even the United Arab Emirates, the region’s self-proclaimed safe haven in 2011, found its investors reeling as the Dubai Financial Markets Index dropped 12.2 percent during the same period.

But investors are not too distinct in their wait for higher prices, the industry’s most primitive sign of a rebound, before they make a move. “Clients typically buy share when they see prices rising,” said Sassine.