Deposit outflow for the banking sector
The banking sector in Lebanon registered an outflow in deposits of $110 million in July after growing by an average of $700 million each month from January to June. The last three times Lebanon registered an outflow in deposits were in January 2011 after the collapse of the Lebanese government, the summer of 2006 due to the war with Israel and in February 2005 following the assassination of former Prime Minister Rafiq Hariri. Total deposits of the banking sector grew by 3.5 percent in the first seven months of the year to stand at $122 billion, accounting for 84 percent of the sector’s $145 billion in assets. Private sector loans grew by 5.4 percent in the first seven months of the year to stand at $42 billion; those to the public sector grew by just 1.5 percent over the same period to stand at $30 billion.
Anti-money laundering to anti-virus systems
Central Bank Governor Riad Salameh announced last month the implementation of amendments to tighten existing anti-money laundering and terrorism-funding laws. “These [amendments] are designed to buttress the monitoring of terrorism funding in accordance with the Lebanese laws and to organize the cross-border currency movement,” he said. The amendments follow the visit to Beirut of United States Treasury Deputy Secretary Neal Wolin as part of his Middle East tour. He warned the Lebanese banking sector against dealing with Iran and Syria and allowing the US-sanctioned countries from using Lebanon’s banking system to evade the sanctions. Lebanese banks also upgraded their software systems last month, according to the central bank. The upgrade follows the discovery by Moscow-based Kaspersky Lab, a leading computer security firm, of the cyber virus dubbed “Gauss”, capable of stealing browser passwords and online bank account details. The virus was detected on more than 2,500 computers in the Middle East, of which approximately 1,600 were in Lebanon and nearly 500 in Israel.
Lebanon’s first 10-year local currency debt
With a gross public debt standing at $54 billion — 128 percent of gross domestic product — Lebanon issued its first 10-year debt in local currency, at an attractive interest rate of 8.24 percent versus the current 10-year Eurobond coupon rate of 6.1 percent; the previous maximum maturity was seven years for local currency debt. As the finance ministry battles with how to fund the increase in public sector wages, it plans to sell another 10-year dollar denominated debt issue by the end of the year, according to Central Bank Governor Riad Salameh. It also plans on swapping another $1 billion in local currency debt held by the central bank into dollar denominated Eurobonds after $2 billion were swapped earlier in May. In April, Lebanon issued $950 million worth of Eurobonds, of which $600 million have a five-year maturity and offer a 5 percent yield and $350 million with a 14-year maturity and 6.4 percent yield.
Dubai’s Al Habtoor to go public
Dubai-based Al Habtoor Group, a family-owned conglomerate, said it plans to raise $1.6 billion by issuing 25 percent additional shares, which it would list on the Nasdaq Dubai bourse next year. It is also considering listing on exchanges in London and Saudi Arabia and plans to use the proceeds to expand its businesses and add to its property portfolio. Al Habtoor is currently looking into five-star hotels in London and Paris as well as agricultural land in Central and Eastern Europe and private hospitals in the United Arab Emirates and abroad. Al Habtoor’s activities span several sectors including hospitality, construction, education and automobiles. It also owns a 27.5 percent stake in a joint-venture (JV) construction firm with Australia’s Leighton Group, but the JV will not take part in the initial public offering. Grant Thornton has been appointed as the financial adviser. The listing might help volumes on Dubai securities markets, which have still not recovered to their 2008 levels, despite the Dubai Financial Market index increasing by 16 percent year to date.
Egyptian stock market second best performer worldwide
The main Egyptian stock index is up 60 percent year-to-date and is the second best stock market performer this year after Venezuela’s index, up 160 percent year-to-date. This performance comes on the back of a sharp drop in stock prices in 2011 when the Egyptian index ended the year in the red, down 50 percent, following the toppling of former President Hosni Mubarak and its aftermath of upheaval and instability. Egyptian stocks still remain 20 percent below their pre-revolution levels. Volumes on the Egyptian market are also on the rise, crossing $161 million last month, the highest level since mid-2011. Investors seem encouraged by the recent talks between Egypt and the International Monetary Fund. Egypt has requested a loan of $4.8 billion from the IMF to assist the country in dealing with its faltering economy. Not all investors are keen on Egypt though. Société Générale plans on selling its 77 percent stake in Egypt’s National Société Générale Bank with a $2.3 billion market value and is in talks with Qatar National Bank. According to research by Egypt-based investment bank EFG Hermes, an agreement would lead to a full takeover worth $2.5 billion to $2.9 billion.
M.I.T. Enterprise Forum selects five Arab entrepreneurs
Five innovators from the Middle East were awarded the TR35, a Massachusetts Institute of Technology award that recognizes the most outstanding innovators who are under 35 years old across a wide array of sectors. Three of the five innovators selected were from Lebanon: Habib Haddad, chief executive of Wamda, a platform for entrepreneurs in the MENA region, and founder of the Arabic search engine Yamli for which Yahoo acquired a license; Elie Khoury, founder of the web analytics service Woopra; and Hind Hobeika, creator of ButterflEye, goggles that change color to monitor heart rates under water. The other two innovators are Palestinian Sami Khoreibi, founder of Enviromena, a developer of solar projects in the MENA region and Saudi Arabian Abdulrahman Tarabzouni, co-founder of Syphir, behind the development MailRank, which is a system that addresses email productivity problems. The winners will participate in the EmTech MIT Conference from October 24 to 26, 2012, held on MIT’s campuses in Cambridge and focused on emerging technologies, allowing the winners to promote their innovations to a wider audience.
Qatar investing in more Lebanese nuts
Qatar First Investment Bank (QFIB), an independent Qatari Islamic bank, has upped its stake in Al Rifai International Holding, a leading Lebanese nuts and kernels manufacturer, to 35 percent from the 15 percent it had acquired back in December for an undisclosed amount. According to Emad Mansour, chief executive officer of QFIB, “since acquiring a 15 percent stake in Al Rifai late December of last year, the company has shown positive growth prospects. We strongly believe that Al Rifai has the right setup to venture into new markets and diversify its product range.” Since the beginning of the year, Al Rifai has opened five new outlets in Lebanon and now has a total of 50 points of sales. In the first half of the year, the nuts manufacturer’s wholesale performance grew by 63 percent year-on-year and its export-sales by 66 percent year-on-year. Al Rifai plans on opening a new factory in Lebanon in the second quarter of 2013 in order to raise its production capacity in the country to 10,000 tons, in line with its manufacturing facility in Sweden established in 2008. In 2010, Al Rifai Holding raised its capital by $15 million through a private placement led by MedSecurities Investment, a wholly owned subsidiary of BankMed.
