Trading volume down on Beirut bourse

The daily average value of shares traded on the Beirut Stock Exchange (BSE) dropped 21 percent in 2017 to $3.15 million compared with the previous year, according to data provided by Blominvest Bank and the BSE.

The decline was mainly driven by an exceptional deal on the common shares of BLOM Bank on March 1, 2016 resulting from the liquidation of AZA Holding which owned shares in the bank. The transaction, valued at $192.6 million, involved the transfer of the ownership of nearly 20.1 million BLOM shares from AZA Holding to its own shareholders. The decline in the value of traded shares would have been 1.5 percent if this deal was not accounted for.

Marwan Mikhael, Head of Research at Blominvest, said that 2017 did not witness significant capital inflows as investors have been attracted to US and European markets which were improving significantly. He said that although the government achieved some political goals in 2017, its economic feats were not noteworthy. The war in Ersal on the eastern border with Syria also contributed to the decline in investor confidence last year, Mikhael said.

The daily average volume of traded stocks fell 27 percent to around 361,000 shares. If the movement of BLOM shares is not factored in, the fall in the number of traded stocks would be 12 percent.

Mikhael said that the fact that the value of traded shares fell at a much slower pace than that of the drop in their volume is attributed to the financial disclosures of listed companies made in 2017 which revealed improvements in their profits.

The BLOM Stock Index (BSI) increased 0.2 percent last year compared with 2016.