Beirut bourse
outperforms Arab markets

Local exchange down two percent

while major regionals down by two digits

The Beirut Stock Exchange (BSE) has performed better than all the Arab stock markets in 2015 (counting figures from the first 11 months), with the exception of the Palestinian bourse.

The BSE declined by only 1.8 percent. The Saudi stock market dropped by 13 percent, Qatar went down by 18 percent and Dubai by 15 percent. The greatest plunge was in Iraq and Egypt, whose bourses plummeted by 30 percent and 29 percent, respectively. Only the relatively small Palestine bourse had a slightly positive performance.

Imad Saab, senior manager at Fidus Wealth Management, said that the reason for the BSE’s better performance is the fact that the shares listed here are undervalued and that they are being traded near their book value. Some shares, like those of Solidere, are even traded below their book value, he said.

Banks listed on the local exchange have a growth potential and offer high dividend yields, which contributed to their price resilience, according to Saab.

The decline in oil prices has negatively affected the economies of oil producing countries and lowered the energy bill of oil consuming countries, said Nadim Kabbara, Head of Research at FFA Private Bank. The World Bank now projects weaker economic growth in the Gulf region than previously expected. This has negatively affected investors who used to pay a premium for GCC shares betting on good growth prospects, Kabbara said.

Heightened geopolitical risk, a decline in their usually above-average dividend yields, and less foreign exchange stability have also contributed to the decline of Gulf stock markets, according to Kabbara.