Solidere share price doubles
compared with October 2019
Trading volume soars six times
Solidere shares have been witnessing a surge in their prices and trading volumes since December 2019.
The price of Solidere ‘A’ share doubled compared with its closing price in October 2019 while its ‘B’ share surged 91 percent over the same period.
Solidere ‘A’ rose four percent on Monday, June 1, 2020 to close at $10.9 while Solidere ‘B’ ended the day 2.7 percent higher at $10.61.
The trading volume of Solidere ‘A’ soared more than six times to around 900,000 shares in May from less than 150,000 shares in October 2019. Trading volume reached two peaks one in January, 2020 with 1.2 million shares changing hands, and the other in March, 2020 with 1.1 million traded shares.
Faysal Barbir, Director-Capital Markets at FFA Private Bank said a new category of investors have suddenly entered the market, these are mainly depositors who wanted to preserve the value of their savings when the currency was collapsing.
He said that Solidere shares were the only option available on the stock market, especially following press reports about possible haircuts and restructuring of the banking sector and after the publishing of the government plan.
According to Barbir, the jump in the share price was also driven by the fact that Solidere has been selling properties since the beginning of 2020 at a higher pace which would reflect on its earnings for the current year.
Barbir said that buying real estate shares is more convenient for investors who cannot afford to buy real estate properties.
He said that investors are not able to buy Eurobonds because local banks are not willing to sell them at such low prices, in the $18-$21 range.
According to Barbir, after reaching a peak in May, prices have stabilized due to profit taking.
Solidere shares could rise further if a new catalyst emerges such as renewed fears regarding the banking sector or if Solidere announces an improvement in its net profit, he said.
Reported by Shikrallah Nakhoul
Date Posted: Jun 01, 2020