BEIRUT: Lebanese businesses and stock markets reacted positively Monday to the formation of the new Cabinet as demands for quick action to rescue the economy increased.
“The formation of a new Cabinet will have positive impacts on all levels and most notably the economy and security,” said Adnan Kassar, the head of the Economic Committees.
Kassar and other business leaders called on the government to make quick decisions to fix the economy and allow the private sector to invest more on essential projects under stable conditions.
A 24-member Cabinet headed by Prime Minister Tammam Salam finally emerged after more than 10 months of negotiations on the composition of the government.
The Beirut Stock Exchange reacted bullishly in Monday’s trading with the BLOM Stock Index rising by 1.39 percent.
Real estate giant Solidere’s A and B shares rose by 5.30 percent and 4.52 percent respectively.
Shares of BLOM and Audi also rose slightly Monday.
The Cairo-based EFG Hermes Investment firm said the Cabinet’s formation could drive undervalued stocks at Beirut’s bourse higher.
“This is good news for equity markets, in particular since the market is driven by shifts in political sentiment. In fact, the market has been underperforming MENA since January 2011. It lost 19 percent while the Hermes MENA index rose by 12 percent over the same period,” the report said.
It added that Solidere, BLOM and Audi shares were considered undervalued and expected the prices of their stocks to rise in the coming few days.
Business leaders and economists urged the government to speed up long-promised reforms, despite the fact that this Cabinet’s main task is to pave the way for the election of a new president.
“The first priority is to hammer out quickly the ministerial policy or statement in order to win the vote of confidence in the Parliament,” Kassar stressed.
He underlined the need to put in place an emergency strategic plan to pull the economy out of the current economic morass.
Mohamed Choucair, the president of the Beirut Chamber of Commerce and Industry, said there were numerous economic and social files that needed to be addressed quickly by the Cabinet.
He added that the Chamber of Commerce and Industry was ready to assist the government in achieving its goals to revive the economy.
Francois Bassil, the president of the Association of Banks in Lebanon, urged the government to provide the Lebanese Army with whatever it needed to carry out its duties.
“The Cabinet should also curb the growing budget deficit and public debt because they are threatening the future of the Lebanese,” Bassil said.
Bassil also argued that carrying out administrative reforms and filling vacant posts in government departments were among Cabinet’s main priorities.
He noted that the presence of hundreds of thousands of Syrian refugees was further exacerbating Lebanon’s economic woes.
Ghazi Wazneh, a leading economist, said the new Cabinet should proceed with the offshore gas auction on April 10 to help improve Lebanon’s credit rating.
He said the fact that the government enjoyed the support of all the main political groups would make it much easier to make important economic and financial decisions without any objections in Parliament.