BLOM launches Egyptian investment fund
BLOM Bank’s investment arm, Blominvest, is to launch and manage an investment fund in Egypt called the BLOM Pyramids Balanced Fund. The new fund will invest in the burgeoning Egyptian market, where gross domestic product is forecast to grow beyond $200 billion in the next few years.
The fund is to invest a minimum of 50 percent in Egyptian debt instruments and a maximum of 50 percent in equities. Subscription and redemption in the fund is conducted on a weekly basis with a starting unit price of $5,000.
Checking on the up
Lebanon saw a 38.7 percent rise in check clearing activity in the first quarter of 2010. According to figures released by the Association of Banks in Lebanon, total cleared checks came to $16.9 billion. The increase was attributed to a 43.1 percent surge in foreign currency denominated checks, 22.7 percent higher than in local currency.
Activity peaked in March, up by 56.6 percent on the same month last year, and 17.4 percent and 32.6 percent higher than January and February, respectively. The rise in foreign currency denominated checks has led to an increase in dollarization to some 80 percent in the first quarter versus 78.4 percent over the same period in 2009.
Credit handout boosts inter-Arab trade
Credit Libanais, Fransabank and Banque Libano-Francaise (BLF) signed $50 million worth of new agreements in May with the Arab Trade Financing Program (ATFP). The program, a joint Arab financial institution that promotes trade between Arab countries, has to-date provided credit lines worth $7.6 billion, out of which $1.4 billion went to Lebanon.
Credit Libanais inked a new credit line with the ATFP worth $20 million to finance trade transactions between Lebanon and other Arab countries, bringing agreements signed between the two parties to $170 million.
Fransabank signed a $15 million, two-year agreement to boost inter-Arab trade, bringing its total credit with the AFTP to $105 million.
BLF signed a $15 million agreement to fund external trade and enhance Lebanese product competitiveness internationally.
BLC joins World Bank as an issuing institution
The private sector arm of the United States-based World Bank, the International Finance Corporation (IFC), added BLC Bank as an issuing bank to its Global Trade Finance Program (GTFP) last month. The $1 billion global finance program facilitates trade by providing guarantees to support both import and pre-export financing to cover the payment risk in trade transactions with local banks in emerging markets. “BLC Bank will use the facility to increase trade finance offerings to expand their trade finance transactions within an extensive network of countries and banks thus supporting their clients, including small and medium enterprises that help drive job creation,” the bank said in a statement.
BLC is the fourth Lebanese bank to join the program following Banque Libano-Francaise, Bank of Beirut, and Fransabank. In January, the IFC acquired 8 percent of Byblos Bank shares, paying $100 million for common shares in Byblos Invest Luxembourg. BLF was the first bank in the Middle East, and second in the world to join the GTFP program, since expanding its ties with the IFC through becoming a confirming bank.
The IFC has provided trade guarantees worth more than $482 million to Lebanese banks since the finance program started in Lebanon in 2006, while last year committing over $184 million in trade finance to the banking sector. Worldwide, the GTFP has issued over $6.5 billion in guarantees to 177 issuing banks in 80 countries since 2005.
Lebanon weathers the euro crisis
Central Bank Governor Riad Salameh said during his monthly meeting with the Association of Banks in Lebanon that the Lebanese economy and banking sector has not been affected by the Eurozone crisis, which has forced the European Union and the International Monetary Fund to provide close to $1 trillion to bail out Greece and other flailing economies. The governor said that Lebanon was spared from the negative effects of the crisis, and that the deterioration of the euro against the United States dollar is not expected to yield negative repercussions, due to deposits in foreign currency other than the dollar not exceeding 10 percent of total deposits.
Salameh added that Lebanese banks operating abroad have also not been affected.
Saudi banks still hungry for foreign investment
With domestic credit slowing in Saudi Arabia, the country’s banks have continued to focus on foreign investments, according to the central bank, the Saudi Arabian Monetary Agency.
Last year, Saudi banks invested an unprecedented $12.8 billion into foreign markets, bringing combined foreign investment by the country’s 12 commercial banks to $29.9 billion. Foreign outflows slowed in the first month of 2010, but continued to rise in the rest of the first quarter, gaining $1.6 billion to reach $31.5 billion at the end of March. Total foreign assets are marginally down from $56 billion at the end of 2009 to $52.2 billion as of March, attributed to a fall in bank dues from foreign banks and branches.
Lebanon ranked 5th in region for access to capital
Lebanon was ranked fifth out of 12 countries in the Middle East and North Africa region in the United States-based Milken Institute’s Capital Access Index 2009. The index, which measures how countries support economic activity by providing companies with access to capital, reported that Lebanon’s regional and global ranking has remained unchanged since 2008, but remained 10.5 percent higher than its 2007 rating.
Lebanon performed well in the macro-economic sub-index, which assesses a country’s conduciveness to business, coming second in the MENA region after the United Arab Emirates. In the financial and banking sub-index, Lebanon came fifth regionally, and ninth in equity market development. In terms of international funding, Lebanon placed second. In overall MENA rankings, the UAE took the top score, followed by Kuwait, Oman and Saudi Arabia. Iran, Yemen and Syria had the lowest rankings.
Popularity of plastic payments sees surge
The number of credit and debit cards issued in the first two months of the year rose 3.4 percent on the same period in 2009 to reach 1.6 million, according to figures released by the central bank. Point of sale (POS) purchases with cards have been on an upward trend over the past decade, with average monthly domestic payments amounting to $67 million in the first two months of 2010, up 28 percent on last year. In 2007, $34 million in POS purchases were reported in the same period, and in 2008, $44 million. Debit cards account for the majority of plastic payments in Lebanon, at 63.6 percent, followed by credit cards at 20.7 percent, and charge cards at 10.3 percent. The number of ATMs increased 6.8 percent this year on the first quarter 2009.
