SOLIDERE
Solidere’s GDR found itself the beneficiary of positive investor expectations upon news of the planned resumption of peace talks between the Syrians and the Israelis. Even though the real estate giant faced some unnecessary bureaucratic knots, which resulted in delays on its projects, the GDR was buoyed by prospects of peace talks that might generate capital inflows into the real estate sector. The GDR reinforced vital signs of revival as it inched up steadily from December 15’s close of $6.950 to close on January 12 at $8.475, a 21.90% increase in a one-month period.
BLC
On December 23, Banque Libanaise pour le Commerce held a General Assembly to discuss the merger with the United Bank of Lebanon (UBL).
The Assembly revealed a net loss of $4.3m in 1998, well below the $11.7m profit announced earlier and the $15.9m profit in 1997. The discrepancy between the two was the result of a sharp increase of $16.5m in the provisions for doubtful loans to $24.1m. BLC’s GDR had a very volatile month, falling to $13.25, only to rise back again to $13.35 after the turn of the millennium. On January 6, the GDR hit a low of $12.83.
BLOM
In mid-December, Banque du Liban et d’Outre-Mer SAL announced the launch of a new interactive banking voice response system called ALLOBLOM, a 24-hour-a-day service that facilitates banking transactions and information inquiries. BLOM’s GDR was the main highlight of the month: it soared to $28.5 on the back of strong demand supported by sound fundamentals and good value, with a P/E ratio on expected 1999 earnings of 7.33. With the publishing of its full-year 1999 figures, BLOM is expected to further consolidate its position as Lebanon’s most profitable bank.
AUDI
Bank Audi’s announcement that it was to buy back two-thirds of its outstanding GDRs at $20.75 and the Central Bank’s authorization of this plan were two events, the very first of their kind in Lebanon, to promote a certain degree of liquidity and confidence. Audi’s GDR was subject to an initial rise directly after the bank’s announcement. However, soon afterwards, the GDR retreated back to its static price of $20.3 and then managed to inch up just a little to close finally on January 12 at $20.6.
MOROCCO
Moroccan equities started the new year on a hesitant note, with institutional investors remaining largely on the sidelines. However, investors are looking ahead into the year, when GDP is expected to pick up to around 6% from almost zero growth for 1999. The new five-year plan, recently released by the government**,** is likely to promote more economic diversification, reduce the country’s dependence on the agriculture sector, and tackle the high unemployment level. Achieving higher economic growth will spur more activity on the equity market, while the next phase of the state privatization agenda is likely to boost liquidity levels.
EGYPT
The Egyptian market continued its bull run into the second week of the year, registering further gains on the back of healthy earnings results in the telecom sector and consolidation news in the cement sector. Market leader MobiNil announced that its 1999 fourth quarter (Q4) net profit rose 45% to EGP90.4 million ($26.3 million) from EGP62.5 million in Q3, with full-year results amounting to EGP140.8 million on EGP1.5 billion in revenues. Sentiment on the bourse was also boosted by Suez Cement’s bid to buy a 65% stake in Tora Portland Cement for an amount of EGP1.4 billion, or EGP80 per share. The banking sector was also buoyant, boosted by news that a new law on mortgages was being drafted.
JORDAN
Despite easing monetary policy and lower interest rates on JD deposits, the Amman Stock Exchange continued to suffer from thin liquidity, with prices losing ground in the first two weeks of the year. Equity prices have barely moved since last November, when the market witnessed an extraordinary rise. However, the market is expected to witness an increase in fund flows as valuations reach attractive levels and new privatization deals come to the market. This is expected to be supported by growth in the construction and tourism sectors and new automated trading at the ASE from the second quarter of 2000.
