Solidere share prices rise

Market relieved by political consensus

Activity at the Beirut Stock Exchange (BSE) picked up since the designation of Prime Minister Tammam Salam to form a new government last week. The market saw respective trading values of $4 million and $2.5 million on Monday and Tuesday (April 8 and 9). The stock market's performance had been lower than usual since the beginning of 2013. The aggregate traded value dropped to $60 million at the end of the first quarter, compared to around $91 million in the same period in 2012. Traded volume dropped by 29 percent year-on-year to 9.45 million.

Toufic Karam, Head of Capital Markets at FFA Private Bank, said the stock market reacted naturally to the political consensus over Salam: “In light of the strained political situation, the market made a swift reaction to the slightest sign of relief.”

Solidere shares witnessed a revived trading activity since Friday. The price of ‘Solidere A’ grew by some 12 percent to $13.71 at its last closing (April 9), and that of ‘Solidere B’ rose by 10.6 percent to $13.56 . Karam said Solidere’s shares will continue to trade at similar levels on the short-term. However, he said, the market prices of shares are still undervalued.
“Solidere’s prices are forecasted to rise on the long-run.”

During the fourth quarter of 2012, Solidere’s share performance had been subdued due to the volatile political situation. Solidere A fluctuated between a low of $12.15 and a high of $13.49, closing the year at $13. Solidere B traded between a low of $12.13 and a high of $13.48, closing the quarter at $12.93.

Banks' shares were less affected by the relatively stable political situation. BLOM’s listed shares and GDRs, Bank Audi’s listed shares and GDRs, and Byblos’ listed shares saw a slight improvement in trading, but no mentionable price variation. According to Karam, bank shares have seen an appreciation in the beginning of the year. “Around this time of the year banks determine their dividends thus prices do not witness significant changes.”