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SUBMIT NEWS
CHAMPION OF THE DAY
LEADERS NEWS
Solidere shares
30 percent up
Good time to buy
Share
Solidere gained $412.6 million in market capitalization since November 10, two days before the Parliament sessions that approved crucial financial laws.
There are some indicators of positive developments on the local political scene, said Marwan Mikhael Head of the Research Department at Blominvest Bank. Solidere stock is a ‘political barometer’ because it is very sensitive to political and security developments in the country, notwithstanding the company’s performance, he said.
Makram Makarem, Director at the Capital Markets Department of FFA Private Bank, said that there are now rumors for the possibility of electing a president of the republic and this is driving the share price up. People are buying because they are expecting the share price to rise further if a president is elected, he said.
Another factor contributing to the sharp rise in the share price is the fact that Solidere’s shares are bouncing up after having witnessed a steep plunge earlier this month, according to Mikhael.
The previous sharp drop in share prices was driven by the fact that Parliament was delaying sessions to approve vital financial laws that if not ratified would have jeopardized the country’s financial interests and its relationship with international bodies.
Solidere ‘A’ shares closed on Friday 31 percent higher compared with their value on November 10, while its ‘B’ shares jumped 27 percent over the same period.
Solidere ‘A’ and ‘B’ shares closed on Friday at $11.19 and $10.76 respectively, which is higher than their par value of $10, but they are still undervalued.
Makarem said Solidere’s share is undervalued when the company’s net worth and financial performance are taken into consideration.
It would be good to buy Solidere stock now, if the political situation continues to improve, Mikhael said.
Makarem said that Solidere’s shares are politically-sensitive par excellence and that their recent fluctuation was in line with intermittent positive and negative political developments, such as Parliament sessions, the explosion in the southern suburbs, and now the possible presidential elections.
Reported by Shikrallah Nakhoul
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Date Posted:
Nov 27, 2015
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