weekly market watch - credit libanais · france mr. mohammed al jaber 7.00 10 lebanon mr. saad...

ISSUE NO. 345 DECEMBER 17TH

2012 – DECEMBER 21ST 2012

ECONOMIC RESEARCH UNIT

WEEKLY MARKET WATCH

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LLEEBBAANNOONN NEWS

ECONOMIC INSIGHTS

> Lebanon’s Total External Debt Stood At $24.77 Billion In The Year 2011 1

> Arabian Business Magazine Ranks Wealthiest Individuals in the Arab World in 2012 2

> Opened Letters Of Credits Up By 9.15% Up To October 2012 3 > Lebanon’s Balance Of Trade Deficit Hits The $16.06 Billion Mark

Up To November 2012 4 > Budget Deficit Up By 52.62% Through August 2012 5 > Customs Collections Almost Flat Y-O-Y At $2.78 Billion Up to

November 2012 6 > Banque Du Liban's Reserves Reach $51.35 Billion as at Mid

December 2012 7 > Lebanon’s Aِnnual Inflation Reaches 10.3% During The Month

Of November 2012 8

> Cement Deliveries Slow By 6.45% Y-o-Y Up To October 2012 9 > HSBC to Finance the Establishment of the Zouk and Jieh Power

Plants 9

CORPORATE NEWS

> SGBL Raises its Capital by $325 Million to $810 Million 10 > BSE to De-List Bank of Beirut Class “D” Preferred Shares 10

MONETARY PERFORMANCE

> Monetary Aggregates 11 > Money Markets 11

FIXED INCOME

> Fixed Income 12

LEBANESE EQUITIES

> Lebanese Equities & Credit Libanais Indices 13

Lebanon's Economic & Financial Sector Indicators 15 Lebanon's Ratings 16

LEBANON’S TOTAL EXTERNAL DEBT

STOOD AT $24.77 BILLION IN THE

YEAR 2011

According to the World Bank’s

“International Debt Statistics 2013”

report, Lebanon came second in terms of

the highest ratio of total external debt to

Gross National Income (GNI) of 66% in

the year 2011, preceded by Jordan (67%)

only.

ARABIAN BUSINESS MAGAZINE RANKS

WEALTHIEST INDIVIDUALS IN THE ARAB

WORLD IN 2012

According to Arabian Business

magazine, 6 renowned businessmen of

Lebanese descent surfaced among the

Arab world’s wealthiest individuals in

the year 2012, topped by Former Prime

Minister Mr. Saad Hariri (regional rank:

22nd) with an estimated net worth of

$3.70 billion.

OPENED LETTERS OF CREDITS UP BY

9.15% UP TO OCTOBER 2012

According to Banque Du Liban statistics,

the aggregate value of opened L/Cs was

up by 9.15% on an annual basis to $8.62

billion during the first ten months of the

current year from around $7.90 billion in

the same period in 2011.

CUSTOMS COLLECTIONS ALMOST FLAT

Y-O-Y AT $2.78 BILLION UP TO

NOVEMBER 2012

Figures released by the Lebanese

Customs unveil a shy 0.29% annual

increase in customs collections to around

$2.78 billion during the first eleven

months of 2012 from around $2.77 billion

a year earlier.

Weekly Market Watch

ECONOMIC RESEARCH UNIT - SOFIL CENTER, BEIRUT LEBANON - TEL: 01-200028/9 FAX: 01-326786

Weekly Market Watch


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"BDL" Banque Du Liban "ABL" Association of Banks in Lebanon "MOF" The Lebanese Ministry of

Finance "BOP" Balance of Payment "IMF" The International Monetary Fund "Moody's" Moody's Investors Service "BSE" Beirut Stock Exchange "GDRs" Global Depositary Receipts "M1" Currency in Circulation + Demand

Deposits in LBP "M2" M1 + Other Deposits in LBP "M3" M2 + Deposits in Foreign Currencies "M4" M3+ Treasury Bills Held By Non Banking System, Including Accrued

Interests "CPI" Consumer Price Index "PPI" Producer Price Index "CLASI" Credit Libanais Aggregate Stock Index

"CLFI" Credit Libanais Financial Sector Stock Index

"CLCI" Credit Libanais Construction Sector Stock Index “EIU” Economist Intelligence Unit "P/E" Price to Earnings Multiple "P/BV" Price to Book Multiple "YTD" Year To Date "YTD Price Performance" Yield to Date Price Appreciation

"Forex" Foreign Exchange "LBP" The Lebanese Pound "USD" The United States Dollar "Yen" The Japanese Yen "GBP" The British Pound/ Sterling Pound "CHF" The Swiss Franc "Y-O-Y" Year-On-Year "GDP" Gross Domestic Product

"MENA" Middle East and North Africa

"FOMC" Federal Open Market Committee

“LE” “LE” Livre Egyptienne – Egyptian Pound

“SAR” Saudi Arabian Riyal “AED” United Arab Emirates Dirham “BD” Bahraini Dinar

“”

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LEBANON’S TOTAL EXTERNAL DEBT STOOD AT $24.77 BILLION IN THE YEAR 2011

The World Bank issued on the 21st of December, 2012 its annual “International Debt Statistics 2013” report in

which it provides a glimpse on the external debt of some 128 developing countries during the year 2011. The

report highlighted that net debt inflows to developing countries in the year 2011 fared better than analysts’ expectations, with said figure dropping 9% y-o-y to $465 billion on the back of the 143% contraction in inflows from official creditors.

As far as the Middle East & North Africa region is concerned, Egypt recorded the highest external debt figure of $35.00 billion in the year 2011, followed by Morocco ($29.05 billion), Lebanon ($24.77 billion) and Tunisia ($22.34 billion).

On the local front, Lebanon came second in terms of the highest ratio of total external debt to Gross National Income (GNI) of 66% in the year 2011, preceded by Jordan (67%) only, and followed and at quite a distance by Djibouti (63%), Tunisia (53%), Morocco (32%) and Yemen (23%), only to name a few. Lebanon also ranked third with regards to the ratio of total external debt to exports (103%) in the MENA region, preceded only by

Jordan (134%) and Djibouti (173%).

As depicted by the following section, Lebanon’s GNI surpassed the $40.14 billion mark in the year 2011, in

comparison with a lower $38.50 billion figure in the year 2010. Additionally, Lebanon witnessed some major improvements with regards to its current account deficit which tightened to $4.16 billion in the year 2011 from $7.46 billion in 2010.

Weekly Market Watch

SOURCE: WORLD BANK, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 1

Algeria

Iran

Syria

Egypt

Yemen

Morocco

Tunisia

Djibouti

Lebanon

Jordan

4%

5%

9%

17%

23%

32%

53%

63%

66%

67%

Ratio of Total External Debt to GNI in the MENA

Region as of the Year 2011 (in %)

Source: World Bank, Credit Lianas Economic Research Unit

Algeria

Syria

Yemen

Egypt

Tunisia

Morocco

Lebanon

Jordan

Djibouti

9%

24%

73%

74%

99%

102%

103%

134%

173%

Ratio of Total External Debt to Exports in the MENA

Region as of the Year 2011 (in %)

Source: World Bank, Credit Lianas Economic Research Unit

CountryTotal External Debt

(in USD millions)

Total Long-Term External

Debt (in USD millions)

Ratio of Total External

Debt to Exports (in %)

Ratio of Total External

Debt to GNI1 (in %)

Algeria 6,072 3,091 9% 4%

Djibouti 767 642 173% 63%

Egypt 35,001 30,596 74% 17%

Iran 19,113 4,859 - 5%

Jordan 17,634 7,496 134% 67%

Lebanon 24,767 21,101 103% 66%

Morocco 29,049 25,157 102% 32%

Syria 4,968 3,998 24% 9%

Tunisia 22,335 16,949 99% 53%

Yemen 6,418 5,876 73% 23%

GNI1: Gross National Income

Key Indebtedness Indicators For The Year 2011

Source: World Bank, Credit Libanais Economic Research Unit

Ratio of Total External Debt to Exports in the MENA Region as of

in USD millions2000 2005 2008 2009 2010 2011

Gross National Income 17,581 21,674 30,517 34,697 38,497 40,147

Exports of Goods, Services & Primary Income - 14,958 24,813 23,137 22,251 26,760

Personal Transfers & Compensation of Employees - 4,924 7,181 7,558 7,351 7,403

Imports of Goods, Services & Primary Income - 18,768 31,276 31,705 32,469 33,494

Primary Income on FDI1 - 95 121 95 209 183

Current Account Balance - (2,748) (4,103) (6,741) (7,462) (4,163)

International Reserves 5,944 11,887 20,244 29,103 31,514 33,741

FDI1: Foreign Direct Investments

Lebanon: Major Economic Aggregates

Source: World Bank, Credit Libanais Economic Research Unit

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ARABIAN BUSINESS MAGAZINE RANKS WEALTHIEST INDIVIDUALS IN THE ARAB WORLD IN 2012

According to Arabian Business magazine’s “Rich List 2012 – The Arab World’s Richest People” report,

which positions wealthy Arab individuals based on their respective net worth, 6 renowned businessmen of

Lebanese descent surfaced among the Arab world’s wealthiest individuals, topped by Former Prime

Minister Mr. Saad Hariri (regional rank: 22nd) with an estimated net worth of $3.70 billion in 2012, down

from $3.80 billion in 2011. The list positioned Mr. Bahaa Hariri 2nd on a local basis and 23rd in the Arab

World with a net worth of $3.65 billion, followed by Mr. Nick and Mrs. Nayla Hayek (regional rank: 30th

<$3.40 billion>), Mr. Taha Mikati (regional rank: 31st <$3.30 billion>), Prime Minister Mr. Najib Mikati

(regional rank: 33rd <$3.00 billion>) and Mr. Ayman Hariri (regional rank: 48th <$2.15 billion>). As for

the Arab region, Saudi Arabia led the top 3 positions, with Prince Alwaleed Bin Talal topping the list of

Arab billionaires for the ninth consecutive year, with an estimated fortune of $25.90 billion, followed by

the Olayan Family ($12.90 billion) and Mr. Mohammed Al Amoudi ($11.50 billion). In addition, the article

revealed that the combined wealth of the Arab world’s 50 wealthiest individuals rose by a mere 0.2% over

the year 2012 to reach $257.20 billion at present from $256.67 billion a year earlier. Saudi Arabia houses

the majority (23) of Arab billionaires, followed by the United Kingdom (5 Arab billionaires), the United

Arab Emirates (3 Arab billionaires), Kuwait (3 Arab billionaires), Palestine (3 Arab billionaires), Egypt (2

Arab billionaires) and Lebanon (2 Arab billionaires) on a respective basis.

Weekly Market Watch

SOURCE: ARABIAN BUSINESS MAGAZINE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 2

Residence NameNet Worth

($ Billion) in 20122012 rank

Saudi Arabia HRH Prince Alwaleed Bin Talal 25.90 1

Saudi Arabia Olayan Family 12.90 2

Saudi Arabia Mohammed Al Amoudi 11.50 3

Egypt The Sawiris Family 11.20 4

Saudi Arabia Issam Alzahid 11.00 5

Kuwait Al Kharafi Family 8.60 6

Saudi Arabia Bin Ladin Family 8.10 7

Kuwait Bukhamseen Family 7.20 8

Palestine Mr. Said Khoury 7.20 9

France Mr. Mohammed Al Jaber 7.00 10

Lebanon Mr. Saad Hariri 3.70 22

Switzerland Mr. Bahaa Hariri 3.65 23

Switzerland Nayla and Nick Hayek 3.40 30

Saudi Arabia Mr. Taha Mikati 3.30 31

Lebanon Mr. Najib Mikati 3.00 33

Saudi Arabia Mr. Ayman Hariri 2.15 48

Source: Arabian Business Magazine, Credit Libanais Economic Research Unit

Major Top Arab Billionaires in 2012

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Mr. Saad Hariri

Mr. Bahaa Hariri

Nayla and Nick Hayek

Mr. Taha Mikati

Mr. Najib Mikati

Mr. Ayman Hariri

3.70 3.653.40 3.30

3.00

2.15

Top Billionaires of Lebanese Origin in 2012 ($ Billion)

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OPENED LETTERS OF CREDITS UP BY 9.15% UP TO OCTOBER 2012

According to Banque Du Liban statistics, opened letters of credits (L/Cs), a measurement tool for trade activity, gained a shy 1.20% y-o-y during the month of October 2012 to $720.78 million, up from $712.21 million in

October 2011. Concurrently, the aggregate value of opened L/Cs was up by 9.15% on an annual basis to $8.62 billion during the first ten months of the current year from around $7.90 billion in the same period in 2011.

Documentary L/Cs opened to finance imports activities widened by 18.51% y-o-y to around $5.31 billion, from nearly $4.48 billion as at end of October of last year. Utilized credits for imports neared $5.11 billion comparing to $4.39 billion last year. On the other hand, inward bills for collection, another documentary credit form of financing (backed by invoices), fell by 10.90% y-o-y to $1.58 billion down from $1.77 billion as at end of October 2011.

Documentary L/Cs opened to finance exports activities shed $105.83 million on a yearly basis to around $3.32 billion. Utilized credits to finance exports firmed at around $3.06 billion (92.17% of opened L/Cs for exports), from $3.02 billion (88.35% of opened L/Cs for exports) as at end of October 2011. On the other hand, outward bills for collection shed $2.05 billion on a yearly basis to $1.36 billion, with the value of outstanding outward

bills reaching $438.05 million, in comparison with $487.21 million by end of October 2011.

Weekly Market Watch

SOURCE: BDL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 3

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Oct-2011 Oct-2012

3,421.473,315.64

3,408.51

1,361.07

$ Million

Opened Letters of Credits & Outward Bills For Exports' Financing

– Opened Credits – Outward Bills

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Oct-2006 Oct-2007 Oct-2008 Oct-2009 Oct-2010 Oct-2011 Oct-2012

4,027.44

5,178.19

7,385.11

6,261.19

7,865.72 7,898.10

8,620.69 Million

Evolution of Total Opened L/Cs

Source: BDL, Credit Libanais Economic Research Unit

0

1,000

2,000

3,000

4,000

5,000

6,000

Oct-2011 Oct-2012

4,476.63

5,305.05

1,774.711,581.28

$ Million

Opened Letters of Credits & Inward Bills For Imports' Financing

– Opened Credits – Inward Bills

$ Million Oct-2011 Oct-2012Y-O-Y

% Change

Documentary L/Cs

– Opened Credits 3,421.47 3,315.64 -3.09%

– Utilized Credits 3,022.82 3,055.96 1.10%

– Outstanding Credits 1,144.96 1,276.46 11.49%

Bills For Collection

– Outward Bills 3,408.51 1,361.07 -60.07%

– Outstanding Bills 487.21 438.05 -10.09%


Documentary Credits For Exports' Financing For The Ten-Month

Period Ending

$ Million Oct-2011 Oct-2012Y-O-Y

% Change

Documentary L/Cs

– Opened Credits 4,476.63 5,305.05 18.51%

– Utilized Credits 4,391.78 5,107.79 16.30%

– Outstanding Credits 870.94 998.96 14.70%

Bills For Collection

– Inward Bills 1,774.71 1,581.28 -10.90%

– Outstanding Bills 175.18 153.48 -12.38%


Documentary Credits For Imports' Financing For The Ten-Month

Period Ending

Balancce

Weekly Market Watch

SOURCE: HIGHER CUSTOMS COUNCIL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT

4

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LEBANON’S BALANCE OF TRADE DEFICIT HITS THE $16.06 BILLION MARK UP TO November 2012

On the current account side of the balance of payment, Lebanon’s balance of trade deficit added $0.58 billion year-on-year to around $16.06 billion up to the month of November 2012, according to statistics published by

Lebanon’s Higher Customs Council. This is attributed to some $0.75 billion annual increase in imports to around $20.16 billion, counterbalancing the $175 million rise in exports to $4.10 billion.

The United States of America topped the list of countries exporting to Lebanon, with an exports bill of $2,306 million (11.44% of Lebanon’s imports), propelled by a surge in fuel imports to the benefit of Electricite Du

Liban. Switzerland, on the other hand, led the list of countries importing from Lebanon, with an imports’ invoice of $467 million (11.38% of Lebanon’s exports).

Exports of “pearls, precious or semi-precious stones” represented the bulk of exported goods, accounting alone

for 93.43% ($1,620 million) of total exports, followed by “machinery & mechanical appliances” ($494 million <10.85%>), and “base metals & articles of base metals” ($422 million <10.23%>). On the other hand, “mineral products” constituted the lion’s share of imported goods ($5,434 million <24.24%>), followed by “machinery & mechanical appliances” ($1,538 million <9.40%>), “chemical products” ($1,854 million <4.56%>), and “pearls, precious or semi-precious stones” ($1,451 million <7.98%>).

Product

Value

($ Million)

% of

Total

Pearls, Precious or Semi-

Precious Stones1,620 39.49%

Machinery & Mechanical

Appliances434 10.58%

Base Metals & Articles of

Base Metal422 10.29%

Prepared Foodstuffs 354 8.63%

Others 1,272 31.01%

Total Exports 4,102 100%

Source: Higher Customs Council, Credit Libanais Economic Research Unit

Breakdown of Exports by Product

in the First Eleven Months of the Year 2012

Product

Value

($ Million)

% of

Total

Mineral Products 5,497 27.27%

Machinery & Mechanical

Appliances1,895 9.40%

Chemical Products 1,584 7.86%

Pearls, Precious or Semi-

Precious Stones1,481 7.35%

Others 9,701 48.12%

Total Imports 20,158 100%


Breakdown of Imports by Product

in the First Eleven Months of the Year 2012

Switzerland 467 11.38%

UAE 329 8.02%

Saudi Arabia 328 8.00%

Syria 251 6.12%

Iraq 190 4.63%


Major Export Destinations (in USD Million)

USA 2,306 11.44%

Italy 1,615 8.01%

China 1,606 7.97%

France 1,418 7.03%

Germany 1,093 5.42%


Major Import Sources (in USD Million)

-20,000

-16,000

-12,000

-8,000

-4,000

0

4,000

8,000

12,000

16,000

20,000

24,000

November 2011 November 2012

USD MillionCumulative Balance of Trade Deficit

Exports Imports Deficit


Balance of Trade YOY

(US$ Million) November 2011 November 2012 % Change

Exports 3,927 4,102 4.46%

Imports 19,408 20,158 3.86%

Trade Deficit (15,481) (16,056) 3.71%Source: Higher Customs Council, Credit Libanais Economic Research Unit

For The Eleven-Month Period Ending

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Weekly Market Watch

SOURCE: MINISTRY OF FINANCE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT

5

BUDGET DEFICIT UP BY 52.62% THROUGH AUGUST 2012

Lebanon’s fiscal deficit (budgetary & treasury) neared $1.49 billion as at the end of August 2012, up from $0.98 billion during the same period last year. The primary balance, however, registered a surplus of $787 million in

comparison with a larger surplus of $1,505 million a year earlier. Government revenues rose 5.12% y-o-y to

$6.57 billion mainly buoyed by a 7.60% rise in income tax revenues to $1.38 billion. In parallel, government expenditures (including debt service) increased by 11.53% annually to just over $8.05 billion up to August, fueled by some $550.65 million increase in transfers to EDL. Consequently, the deficit to total expenditures’ ratio widened to 18.48% up from 13.50% in the same period last year.

Tax Revenues

(73.38%)

•Misc Tax Revenues (35.12%)

•Customs Revenues (15.04%)

•VAT Revenues (23.22%)

Non-Tax Revenues

(22.07%)

Treasury Receipts

(4.55%)

•Guarantees (1.36%)

•Municipalities (2.06%)

•Deposits (0.53%)

•Other (0.60%)

Breakdownof

Government Revenues

Public Finance Y-O-Y

(USD Million) August-2011 August-2012 % Change

Revenues 6,250 6,570 5.12%

Expenditures (including debt servicing) 7,226 8,059 11.53%

Debt Servicing 2,481 2,277 -8.24%

Total Deficit (976) (1,489) 52.62%

Total Primary Surplus/ (Deficit) 1,505 787 -47.69%

Deficit / Total Expenditures 13.50% 18.48%

Source: The Lebanese Ministry of Finance, Credit Libanais Economic Research Unit

For the Eight-Month Period Ending

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6,250 6,5707,226

8,059

-2,000

0

2,000

4,000

6,000

8,000

Aug-11 Aug-12

USD MillionCumulative Budget Deficit

RevenuesExpenditures (including debt servicing)Total Deficit

General Exp.

(53.74%)

•Electricité Du Liban (17.88%)

•Budget Exp. Prev. Year (4.38%)

•Other(31.48%)

Debt Service

(28.25%)

•Interest Payment (17.43%)

•Foreign Debt Principal Repayment (10.82%)

Treasury Exp.

(18.01%)

•Guarantees (0.61%)

•Municipalities (4.54%)

•Deposits (0.58%)

•Other (12.28%)

Breakdownof

Government Expenditures

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Weekly Market Watch

SOURCE: HIGHER CUSTOMS COUNCIL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT

6

CUSTOMS COLLECTIONS ALMOST FLAT Y-O-Y AT $2.78 BILLION UP TO NOVEMBER 2012

Figures released by the Lebanese Customs unveil a shy 0.29% annual increase in customs collections to around $2.78 billion during the first eleven months of 2012 from around $2.77 billion a year earlier. Said increase is

mainly attributed to a 3.40% hike in customs revenues to $1.43 billion, outweighing the 2.84% drop in VAT revenues to $1.34 billion.

The Port of Beirut amassed the lion’s share (59.84% >$2,327.21 million<) of total customs receipts up to

November 2012 trailed, and by far, by the Beirut International Airport (8.33% >$231.10 million<) and the Tripoli Port (3.44% >$95.40 million<).

The average customs tariff rate settled at 8% in November 2012, unchanged from the readings it registered in

October 2012 and November of last year.

Port of Beirut83.84%

BIA8.33%

Tripoli Port3.44%

Others4.39%

Breakdown of Customs Collections per Custom Offices Up To

November 2012

Source: Lebanese Customs, Credit Libanais Economic Research Unit

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Nov-08 Nov-09 Nov-10 Nov-11 Nov-12

972

1,679 1,7791,387 1,434

1,164

1,2501,371

1,380 1,341

Custom Revenues VAT Revenues

2,136

2,9293,150

2,767 2,775

Breakdown of Aggregate Customs Collections

USD Million


in USD Million Nov-11 Nov-12 % Change

Custom Revenues 1,387 1,434 3.40%

VAT Revenues 1,380 1,341 -2.84%

Custom Collections 2,767 2,775 0.29%Source: Lebanese Customs, Credit Libanais Economic Research Unit

Port of Beirut 2,327.21

Beirut Internaitonal Airport ("BIA") 231.10

Tripoli Port 95.40

Others 121.08

Total 2,774.79

Breakdown of Custom Collections Up To

November 2012 ($ Million)


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Weekly Market Watch

SOURCE: BDL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 7

BANQUE DU LIBAN'S RESERVES REACH $51.35 BILLION AS AT MID DECEMBER 2012

The Lebanese Central Bank published its mid December balance sheet conveying a 0.02% ($7.69 million) bi-weekly expansion in Lebanon’s foreign assets (foreign currency reserves) portfolio to $98.653 billion, from $35.675 billion a fortnight ago. On an annual basis, foreign assets have grown markedly by 10.30% from

$32.35 billion as at mid December 2011. On the other hand, the value of gold reserves shed $273.44 million (1.72%) during the first half of December to $15.66 billion. The value of gold reserves at Banque Du Liban, however, appreciated by $1.03 billion y-o-y from $14.63 billion in mid December 2011. Consequently, total reserves (foreign currency and gold) have grown by $4.37 billion during the one-year period

ending mid December 2012 to $51.35 billion, up from $46.98 billion in mid December 2011, as elaborated hereunder:

The Central Bank’s balance sheet contracted by 0.12% during the first half of December 2012 to $78.42 billion, dragged by the 0.51% bi-weekly dip in total reserves to $51.35 billion.

The share of gold and foreign currency reserves shrank to 65.47% of total BDL’s balance sheet as at mid December, down from 65.99% in the same period last year.

$ BillionMid December

2006

Mid December

2007

Mid December

2008

Mid December

2009

Mid December

2010

Mid December

2011

Mid December

2012

Gold 5.77 7.36 7.65 10.27 12.81 14.63 15.66

Foreign Assets 12.83 12.27 19.58 28.04 30.85 32.35 35.68

Total Reserves 18.60 19.63 27.22 38.31 43.67 46.98 51.35

Source: Banque Du Liban, Credit Libanais Economic Research Unit

$ Billion

Mid

December

2011

End of

November

2012

Mid December

2012Bi-weekly (%) Y-O-Y (%)

Total Reserves 46.98 51.61 51.35 -0.51% 9.29%

Securities Portfolio 11.58 11.79 11.80 0.12% 1.89%

Loans to Public Sector 0.09 0.04 0.04 0.21% -60.40%

Loans to Local Financial Sector 1.39 1.62 1.62 -0.09% 16.04%

Valuation Adjustment 0.00 0.00 0.00 0.00% 0.00%

Other Assets 10.91 13.21 13.37 1.18% 22.51%

Fixed Assets 0.23 0.26 0.26 0.07% 10.56%

Total Assets 71.19 78.52 78.42 -0.12% 10.16%

Currency in Circulation Outside BDL 2.05 2.28 2.31 1.29% 12.95%

Financial Sector Deposits 49.12 54.91 54.95 0.08% 11.89%

Public Sector Deposits 5.92 6.22 6.25 0.36% 5.54%

Valuation Adjustment 9.04 10.39 10.13 -2.48% 12.08%

Other Liabilities 2.28 1.73 1.80 3.64% -21.13%

Capital Accounts 2.79 2.98 2.98 0.00% 6.75%

Total Liabilities 71.19 78.52 78.42 -0.12% 10.16%

Source: Banque Du Liban, Credit Libanais Economic Research Unit

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

Mid

December

2006

Mid

December

2007

Mid

December

2008

Mid

December

2009

Mid

December

2010

Mid

December

2011

Mid

December

2012

12.83 12.27

19.58

28.0430.85

32.35

35.68

$ Billion

Evolution of Banque Du Liban's Foreign Assets

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

Mid

December

2006

Mid

December

2007

Mid

December

2008

Mid

December

2009

Mid

December

2010

Mid

December

2011

Mid

December

2012

5.77

7.367.65

10.27

12.81

14.6315.66

$ Billion

Evolution of Banque Du Liban's Gold Reserves

Total

Reserves65.47%

Securities

Portfolio15.05%

Loans to

Public Sector0.05%

Loans to Local

Financial Sector

2.06%

Valuation

Adjustment0.00% Other Assets

17.04%

Fixed Assets

0.33%

Breakdown of BDL's Balance Sheet As At Mid

December 2012


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Weekly Market Watch

SOURCE: CENTRAL ADMINISTRATION OF STATISTICS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 8

LEBANON’S AِNNUAL INFLATION REACHES 10.3% DURING THE MONTH OF NOVEMBER 2012

According to the Central Administration of Statistics (“CAS”), Lebanon’s annual inflation rate, as captured by the change in the consumer price index (“CPI”), hit the 10.3% mark during the month of November 2012. More specifically, November’s CPI reached 129.6 up from 117.6 a year before. Said rise is mainly attributed to the

5.3% annual appreciation in the price of food & non-alcoholic beverages, the index’s largest constituent (19.9% weight), coupled with a 44.1% rise in housing rental costs and a 14.5% increase in education costs. However, and on a monthly basis, Lebanon’s CPI edged 0.3% lower in November on the back of the 3.2% contraction in

transportation costs in tandem with the decline in gasoline prices. The following section captures the fluctuation in Lebanon’s consumer basket’s key constituents on a monthly and annual basis:

Monthly

(October 2012-November 2012)

Annually

(November 2011-November 2012)Weight

Food & Non-Alcoholic Beverages 0.2% 5.3% 19.9%

Alcoholic Beverages & Tobacco 0.5% 8.7% 2.1%

Clothing & Footwear 0.4% 4.5% 6.2%

Housing 0.0% 44.1% 16.2%

Water, Electricity, Gas & Other Fuels -0.3% 6.5% 9.5%

Furnishings, Household Equipment & Routine

Household Maintenance0.0% 1.2% 3.9%

Health 0.0% -0.2% 6.8%

Transportation -3.2% 1.5% 12.3%

Communication 0.0% 0.0% 4.8%

Recreation, Amusement, and Culture 0.0% 7.1% 3.7%

Education 0.0% 14.5% 7.7%

Restaurant & Hotels 0.0% 4.1% 2.7%

Miscellaneous Goods & Services 0.2% 3.6% 4.2%

Consumer Price Index -0.3% 10.3% 100.0%

Source: Central Administration of Statistics, Credit Liabanais Economic Research Unit

Price Volatility in November 2012

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Food &

Non-A

lcoholic

Bevera

ges

Alc

oholic B

evera

ges

& T

obacc

o

Clo

thin

g &

Footw

ear

Housin

g

Wate

r, E

lectr

icity, G

as &

Oth

er Fuels

Furn

ishin

gs, H

ousehold

Equip

ment &

Routine

Household

Main

tenance

Health

Tra

nsport

ation

Com

munic

ation

Recre

ation, A

musem

ent,

and C

ulture

Education

Resta

ura

nt &

Hote

ls

Mis

cellaneous G

oods &

Serv

ices

5.3%

8.7%4.5%

44.1%

6.5%

1.2%

-0.2%

1.5%0.0%

7.1%

14.5%

4.1% 3.6%0.2% 0.5%

0.4%0.0%

-0.3%

0.0% 0.0%

-3.2%

0.0% 0.0% 0.0% 0.0% 0.2%

Monthly & Y-O-Y Price Volatility In November 2012

Y-O-Y Monthly

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Weekly Market Watch

SOURCE: BDL, AL AKHBAR, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 9

CEMENT DELIVERIES SLOW BY 6.45% Y-O-Y UP TO OCTOBER 2012

Cement deliveries, the coincident indicator of construction activity, rose by 6.68% month-on-month to 551,162 tons in October 2012 in comparison with 516,634 tons in September 2012. On a cumulative basis, however, cement deliveries fell by 6.45% year-on-year to 4,474,292 tons during the first ten months of 2012, from

4,782,681 tons a year earlier. It is worth highlighting that the average monthly growth rate in cement deliveries reached 6.07% during the first ten month of 2012 in comparison with an average monthly growth rate of 6.34% in the same period in 2011.

The compounded annual growth rate (CAGR) in cement deliveries attained 8.06% during the period extending between October 2006 and October 2012, mirroring the strong appetite for the realty sector during the post-war reconstruction journey.

HSBC TO FINANCE THE ESTABLISHMENT OF THE ZOUK AND JIEH POWER PLANTS

British-based bank HSBC and German-based EKF (Energy and Climate Fund) won a tender to finance the

establishment of the Zouk and Jieh power plants for a total consideration of around $980 million. Moreover, the funding of the two power plants will be at a low interest rate of 4.9%, in addition to a long grace period extending six months following the completion of the two projects. It is worth noting, in this perspective, that the German-based MAN (Maschinenfabrik Augsburg-Nürnberg) group and the Danish-based BWSC (Burmeister & Wain Scandinavian Contractor) group won the bids to establish two new power plants in Zouk and Jieh with delivery expected to be completed in 18 months. The two power plants will have a total capacity of 242 megawatts. It is worth highlighting that the auction was under the supervision of the World Bank and witnessed

the participation of other renowned international companies such as Caterpillar and Wartsila.

October-2006 2,809,484

October-2007 3,300,120

October-2008 3,477,223

October-2009 4,190,768

October-2010 4,416,812

October-2011 4,782,681

October-2012 4,474,292


Evolution of Cumulative Cement

Deliveries (Tons)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

2,809,4843,300,120 3,477,223

4,190,7684,416,812

4,782,6814,474,292

Yealy Evolution of Cement Deliveries


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SGBL RAISES ITS CAPITAL BY $325 MILLION TO $810 MILLION

Societe Generale de Banque au Liban (SGBL) announced recently that it raised its capital by $325 million to around $810 million. As for the breakdown of the capital increase, $100 million (30.8%) were in the form of

new common shares, an additional $100 million (30.8%) were under the umbrella of capitalized retained earnings, while the remaining $125 million (38.4%) were raised through the issuance of non-convertible

preferred shares, at an annual coupon of 7 percent. It is worth noting that said increase aims mainly at boosting the bank’s capital adequacy ratio which is expected to exceed 12% over the next two years.

BSE TO DE-LIST BANK OF BEIRUT CLASS “D” PREFERRED SHARES

According to the Beirut Stock Exchange circular number 369/2012 dated December 18, 2012, the Beirut Stock Exchange announced recently the cessation of trading sessions on the Bank of Beirut Class “D” preferred shares issued and listed since year 2007, and this being effective as of December 21, 2012. It is worth noting that the preferred shares are non-cumulative, perpetual, and redeemable, and carry a dividend yield of 9% per annum.

Weekly Market Watch

SOURCE: ALMUSTAQBAL, BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 10

MONETARY AGGREGATES

On the monetary front, all monetary indicators closed on a positive note during the week of December 6, 2012.

The overall money supply “M4” increased by $405.49 million to settle at around $109.54 billion. The expansion in

the “M4” monetary aggregate during the aforementioned week came along with a $36.19 million week-on-week increase in non-banking sector treasury bills. Lebanese-pound denominated deposits and currency in circulation “M1” gained some $172.95 million to around $4.38 billion on the back of some $178.44 million increase in money in circulation which outweighed the $5.31 million drop in demand deposits. Furthermore, local currency term deposits “M2” expanded by $212.65 million

during the week of December 6, while marking a robust twelve-month increase of 13.23% to $43.61 billion. Consequently, private sector term and saving deposits denominated in LBP (“M2- M1”) notched slightly higher to $93.29 billion, with deposits denominated in foreign currencies (“M9–M2”) crawling sluggishly to $60.44 billion.

MONEY MARKETS

The December 13th Treasury bill auction raised LBP 313.92 billion ($208.24 million), down from around LBP 358.26

billion ($237.65 million) in the previous week. The auction resulted in a deficit over nominal subscription of LBP 77.31 billion ($51.28 million) comparing to a surplus of LBP 240.91 billion ($159.81 million) in the preceding week.

Subscriptions were majority (88.46%) concentrated in the three-year to maturity bills, followed by the one-year

(9.05%) and two-year (2.48%) bills.

The weighted average yield on Lebanese Pound Treasury bills rose to 6.38% during the December 13th auction from 6.34% during the latest auction of same maturities held on the 29th of November. This owes to the increasing

subscription stake in the higher-yielding three-year bills to 88.46% in the current auction from 78.05% in that of November 29, added the 3 basis points (bps) rise in the one-year t-bills’ yield to 8.95%. On the other hand, the yield on the two-year and three-year tenor T-bills remained flat at 5.84% and 6.50% respectively.

CORPORATE NEWS ORPORATE NEWS CORPORATE NEWS ORPORATE NEWS

MMOO

NNEETTAARRYY PP

EERRFFOO

RRMM

AANN

CCEE

Weekly Market Watch

SOURCE: BDL, REUTERS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 11

M oney Supply

USD M illion

M 1 4,206 4,379 4.11%

M 2 43,395 43,608 0.49%

M 3 103,740 104,049 0.30%

M 4 109,132 109,538 0.37%

M 2-M 1 39,189 39,229 0.10%

M 3-M 2 60,345 60,442 0.16%Source: Banque Du Liban, Credit Libanais Economic Research Unit

November 29, 2012 December 6, 2012 % Change

6,000

26,000

46,000

66,000

86,000

November 29, 2012 December 6, 2012

109,132 109,538103,740 104,049

Money Supply - USD Million -

M4 M3


Lebanese

Treasury

Bills

Yield (%) Face Value ( in billio ns o f

LB P )

% of Total

Face Value

Lebanese

Treasury

Bills

Yield (%) Face Value ( in billio ns o f

LB P )

% of Total

Face Value

3 Months 4.43% 128.385 35.84% 12 Months 5.38% 28.423 9.05%

6 Months 4.99% 161.331 45.03% 24 Months 5.84% 7.799 2.48%

60 Months 6.74% 68.541 19.13% 36 Months 6.50% 277.700 88.46%

Total 358.258 100% Total 313.922 100%

December 6, 2012 Auction December 13, 2012 Auction

Source: Reuters, Credit Libanais Economic Research Unit

Lebanese Treasury Bills 3 Months 6 Months 12 Months 24 Months 36 Months 60 Months 84 Months 96 Months 120 Months

Treasury Yield 4.43% 4.99% 5.38% 5.84% 6.50% 6.74% 7.50% 7.80% 8.24%

3 Months

6 Months 12 Months24 Months

36 Months60 Months

84 Months96 Months 120 Months

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

0 1 2 3 4 5 6 7 8 9 10

On The Run Yield Curve

FFII XX

EEDD

IINN

CCOO

MMEE

FIXED INCOME

Activity on the Lebanese Eurobond market remained at subdued levels this week ahead of end of year holidays. Lebanon’s five-year credit default swap remained unchanged at 430.0 basis points (bps) while static spreads settled marginally lower at 391.85 bps during the week of December 21, 2012, down from 392.15 bps a week

earlier.

Weekly Market Watch

SOURCE: CREDIT LIBANAIS CAPITAL MARKETS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 12

Lebanese Eurobonds Currency Coupon Maturity Bid Ask Bid YieldBid Static

Spread

Republic of Lebanon USD 9.125% Mar-13 100.375 101.750 7.292% 706

Republic of Lebanon USD 8.625% Jun-13 103.375 104.000 1.850% 155

Republic of Lebanon USD 7.375% Apr-14 107.000 107.625 1.971% 165

Republic of Lebanon USD 9.000% May-14 108.625 109.625 2.547% 222

Republic of Lebanon USD 5.875% Jan-15 104.000 105.000 3.847% 348

Banque Du Liban USD 10.000% Apr-15 113.750 114.750 3.820% 344

Republic of Lebanon USD 8.500% Aug-15 111.000 112.000 4.046% 364

Republic of Lebanon USD 8.500% Jan-16 111.500 112.500 4.464% 401


Republic of Lebanon USD 4.750% Nov-16 100.000 101.000 4.748% 416






Republic of Lebanon USD 8.250% Apr-21 115.200 116.200 5.908% 454

Republic of Lebanon USD 6.100% Oct-22 100.375 100.875 5.947% 428

Republic of Lebanon USD 7.000% Dec-24 106.000 107.000 6.278% 443


Republic of Lebanon USD 5.000% Oct-17 100.000 101.000 4.998% 423

Source: Credit Libanais Capital Markets

LEBANESE EUROBONDS

Government Eurobonds

LLEEBBAANN

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Weekly Market Watch

SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 13

LEBANESE EQUITIES

Activity on the Beirut Stock Exchange remained at subdued levels this week, with the number of

shares changing hands reaching 868,590 in

comparison with 659,783 shares traded last week. Trades were concentrated in Bank Audi Listed Shares with a total of 473,644 traded shares, accounting for 54.53% of weekly BSE traded volume, on a thin turnover ratio of 0.14%.

Concurrently, value traded rose to around $7.75 million, the bulk of which (63.94%) corresponding to banking sector stocks.

The average daily trading value stood at $1.55 million this week, up from $1.05 million in the previous week. Concurrently, average daily trading

volume advanced to 173,718 shares, from 131,957

shares a week earlier. The Credit Libanais Aggregate Stock Index (“CLASI”) prolonged its upturn for the fourth consecutive week, making a 0.41% weekly increase to 1,006.97, underpinned by seven gainers and

three losers. This is also mirrored by a parallel increase in market capitalization to $10.44 billion. Said increase owes mainly to the significant appreciation in the prices of some major banking shares. In the real estate sector, heavy market cap-

weighted Solidere “A” and “B” bucked their gaining streak to close down by 0.08% and 0.69% this

week at $13.09 and $13.02 respectively. Nevertheless, the Credit Libanais Construction Sector Stock Index (“CLCI”) managed to extend its weekly gains to 705.33, thanks to the 3.33%

weekly increase in the price of Holcim listed shares to $15.50. In the banking sector, the Credit Libanais Financial Sector Stock Index (“CLFI”) notched 0.53% higher this week amid the appreciation in the prices of six categories of banking stocks included in the index

calculation basket, namely those associated with Bank Audi, Bank of Beirut, and BLOM Bank shares.

600

650

700

750

800

850

900

950

1,000

1,050

1,100

21-D

ec-1

1

23-J

an-1

2

25-F

eb-1

2

29-M

ar-

12

01-M

ay-1

2

03-J

un-1

2

06-J

ul-

12

08-A

ug-1

2

10-S

ep-1

2

13-O

ct-

12

15-N

ov-1

2

18-D

ec-1

2

Ind

ex V

alu

e

Credit Libanais Aggregate Stock IndexWeekly Performance

CLASI

CLASI 0.41%

.CLASI Credit Libanais Aggregate Stock Index

Value Daily % Chng Daily Net Chng

1,006.97 -0.319% -3.22

Yr.High Year Hi.Date Yr.Low Year.Lo.Date

1,069.75 5-Mar-12 946.11 23-Oct-12

Life High Life Hi.Date Life Low Life.Lo.Date

1,801.01 7-Jul-08 836.11 25-Mar-09

Friday, December 21, 2012

600

700

800

900

1,000

1,100

1,200

1,300

21-D

ec-11

23-Jan-12

25-Feb-12

29-M

ar-

12

01-M

ay-12

03-Jun-12

06-Jul-

12

08-Aug-12

10-Sep-12

13-O

ct-

12

15-N

ov-12

18-D

ec-12

Ind

ex V

alu

e

Credit Libanais Financial Sector Stock IndexWeekly Performance

CLFI

CLFI 0.53%

600

650

700

750

800

850

21-D

ec-11

23-Jan-12

25-Feb-12

29-M

ar-

12

01-M

ay-12

03-Jun-12

06-Jul-

12

08-Aug-12

10-Sep-12

13-O

ct-

12

15-N

ov-12

18-D

ec-12

Ind

ex V

alu

e

Credit Libanais Construction Sector Stock IndexWeekly Performance

CLCI

CLCI 0.12%

Credit Libanais Previous Closing Weekly

Indices 14-December-2012 21-December-2012 % Change

Credit Libanais Aggregate Stock

Index <.CLASI>1,002.85 1,006.97 0.41%

Credit Libanais Financial Sector

Stock Index <.CLFI>1,194.25 1,200.56 0.53%

Credit Libanais Construction Sector

Stock Index <.CLCI>704.51 705.33 0.12%

Source: Credit Libanais Economic Research Unit

LLEEBBAANN

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The weighted average price to earning (P/E) and price to book (P/BV) multiples of the Beirut Bourse settled at 7.494x and 0.994x on a respective basis.

Weekly Market Watch

SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 14

Source: BSE, Credit Libanais Economic Research Unit

0.000

2.000

4.000

6.000

8.000

December 14, 2012 December 21, 2012

7.50 7.49

0.989 0.994

Evolution of Beirut Bourse Comparable Benchmarks

#REF! #REF!

Previous Last % Change

Value Traded ($) 5,255,039 7,752,366 47.52%

Volume Traded 659,783 868,590 31.65%

Average Daily Trading Value ($) 1,051,008 1,550,473 47.52%

Average Daily Trading Volume 131,957 173,718 31.65%

Market Cap - BSE ($) 10,402,551,799 10,444,566,119 0.40%

Weighted Average P/E 7.496 7.494 -0.03%

Weighted Average P/BV 0.989 0.994 0.48%

Activity Analysis

Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit

Weekly Weekly Weekly Total Market Leading Leading YTD Price

%change Volume Value Listed Capitalisation P/E P/BV Perf.

Traded Traded Shares ($000)

Solidere A $13.09 -0.08% 166,207 $2,221,883 100,000,000 $1,309,000 11.85 1.24 -8.97%

Solidere B $13.02 -0.69% 41,744 $556,770 65,000,000 $846,300 11.79 1.24 -10.21%

BLC Bank $1.90 0.00% - - 51,033,333 $96,963 8.64 1.27 4.97%-

BLC Bank Preferred Class "A" $102.00 0.00% - - 400,000 $40,800 n.a n.a 2.00%

BLC Bank Preferred Class "B" $102.00 0.00% - - 550,000 $56,100 n.a n.a 2.00%

Bank Audi - Listed Shares $6.09 1.84% 473,644 $2,861,374 349,749,204 $2,129,973 4.80 0.88 4.82%

Bank Audi GDR $6.12 2.00% 15,857 $95,177 102,017,651 $624,348 4.82 0.89 8.51%

Bank Audi Preferred "D" $10.35 0.98% 12,000 $124,200 12,500,000 $129,375 n.a n.a 0.49%

Bank Audi Preferred "E" $100.00 0.00% - - 1,250,000 $125,000 n.a n.a -0.50%-

Bank Audi Preferred "F" $100.00 0.00% - - 1,500,000 $150,000 n.a n.a 0.00%-

Bank Of Beirut - Listed Shares $19.00 0.00% 332 $6,308 16,822,467 $319,627 13.10 1.59 -2.06%

Bank Of Beirut Preferred "D" $27.10 4.23% 57,200 $1,550,120 4,000,000 $108,400 n.a n.a 4.23%

Bank Of Beirut Preferred "E" $26.20 0.00% - - 2,400,000 $62,880 n.a n.a 0.77%-

Bank Of Beirut Preferred "H" $26.19 0.00% - - 5,400,000 $141,426 n.a n.a 4.76%-

Byblos Bank - Listed Shares $1.53 -3.16% 73,758 $112,850 565,515,040 $865,238 6.65 0.70 -6.13%

Byblos Bank Preferred Class 2008 $101.70 0.00% - - 2,000,000 $203,400 n.a n.a 0.69%-

Byblos Bank Preferred Class 2009 $103.00 0.00% - - 2,000,000 $206,000 n.a n.a 1.98%-

Byblos Bank GDR $70.00 0.00% - - 1,309,078 $91,635 6.09 0.64 -9.68%-

BEMO Bank - Listed Shares $1.89 0.00% - - 51,400,000 $97,146 15.75 1.24 -19.57%-

BEMO Bank Preferred $100.00 0.00% - - 200,000 $20,000 n.a n.a 0.00%-

BLOM Bank GDR $7.92 1.54% 5,630 $44,567 73,896,010 $585,256 5.39 0.86 6.31%

BLOM Bank Listed Shares $7.64 0.13% 20,791 $158,792 215,000,000 $1,642,600 5.20 0.83 2.96%

BLOM Bank Preferred Class 2011 $10.17 0.00% 327 $3,326 20,000,000 $203,400 n.a n.a 0.39%

RYMCO $2.20 0.00% - - 10,920,000 $24,024 18.05 1.13 -12.00%-

Holcim Liban $15.50 3.33% 1,100 $17,000 19,516,040 $302,499 10.4 1.44 -8.72%

Ciment Blancs Bearer $3.26 0.00% - - 6,000,000 $19,560 11.52 1.93 0.31%-

Ciment Blancs Nominal $3.30 0.00% - - 3,000,000 $9,900 11.66 1.95 36.93%-

Beirut Preferred Fund $103.50 0.00% - - 325,756 $33,716 n.a n.a -0.29%-

Lebanese Equities

BEIRUT STOCK EXCHANGE Closing

Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit

Note: n.a stands for not applicable

Weekly Market Watch

SOURCE: BDL, ABL, IMF, BILANBANQUES, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 15

LLEEBBAANN

OONN’’ SS

MMAAII NN

IINN

DDII CC

AATTOO

RRSS

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

M ACROECONOM IC INDICATORS

GDP ($ Billion) 20.08 21.79 21.86 22.44 25.06 30.08 34.93 39.25 41.46* 44.90*

Real GDP Growth Rate 3.20% 7.50% 1.00% 0.60% 7.50% 9.30% 8.50% 7.50% 1.5%* 3.0%*

GDP Per Capita ($) 5,421 5,805 5,824 5,969 6,666 7,900 9,054 10,044 10,474* 11,197*

Net Foreign Direct Investment ($ Billion) 2.99 1.99 2.79 2.68 3.38 4.33 4.84 4.96 4.90

FDI/GDP Ratio 14.89% 9.15% 12.76% 11.94% 13.47% 14.39% 13.86% 12.64%

INDUSTRY

Industrial Exports ($ Million) 1,087 1,467 1,667 1,738 2,361 2,994 2,645 3,291 3,520 2,202 (5)

Import of Industrial Machinery ($ Million) 109 142 137 130 163 188 199.13 227.15 238.60 220.22 (5)

TOURISM

Total Number of Tourists 1,015,793 1,278,469 1,139,524 1,062,635 1,017,072 1,332,551 1,851,081 2,167,989 1,655,051 1,086,319 (5)

Growth in Tax-Free Spending N.A N.A 2% -15% 17% 56% 13% 21% 10% 1%

REAL ESTATE

Value of Real Estate Transactions ($ Million) 2,882.6 2,883.0 3,295.9 3,120.3 4,174.8 6,443.7 6,958.4 9,478.8 8,841.0 7,165 (6)

Number of Real Estate Sales Transactions 47,118 50,582 50,057 49,051 65,681 80,018 83,465 94,202 82,984 59,081 (6)

Construction Permits (000 sqm) 7,196 7,719 7,928 7,532 7,919 14,281 11,509 15,187 13,980 10,012 (6)

Cement Delivery (000 tons) 2,704 2,729 3,040 3,423 3,945 4,219 4,897 5,227 5,550 4,474 (6)

TRANSPORTATION

Beirut Port: Freight Activity(000 Tons) 4,767 5,060 4,476 4,226 5,318 5,746 5,769 6,469 6,677 6,579 (8)

Beirut Airport: Number of Passengers (million) 2.72 3.2 3.18 2.74 3.41 3.87 4.74 5.55 5.65 5.46 (8)

FOREIGN TRADE

Imports ($ Million) 7,168 9,397 9,340 9,398 11,815 16,137 16,242 17,964 20,158 17,805 (6)

Exports ($ Million) 1,524 1,747 1,880 2,283 2,816 3,478 3,484 4,253 4,265 3,739 (6)

Trade Balance ($ Million) (5,644) (7,650) (7,460) (7,115) (8,999) (12,658) (12,758) (13,711) (15,893) (16,056) (8)

(12,732) (5)

BALANCE OF PAYM ENTS

Balance of Payments ($ Million) 3,385 168 747 2,792 2,037 3,460.60 7,899.00 3,325.20 (1,996) (2,028.7) (6)

Foreign Assets ($ Billion) 12.18 11.48 11.66 12.97 12.39 19.73 28.30 30.85 32.24 35.68 (8)

PUBLIC FINANCE

Government Expenditures ($ Million) 7,027 6,992 6,768 7,880 8,350 9,922 11,388 11,336 11,675 8,059 (4)

Government Revenues ($ Million) 4,415 4,984 4,912 4,853 5,804 7,000 8,428 8,414 9,333 6,570 (4)

Budget Primary Deficit / Surplus ($ Million) 1,515 1,851 1,802 1,335 1,787 2,730 3,380 1,203

Total Deficit ($ Million) (2,612) (2,008) (1,856) (3,027) (2,546) (2,921) (2,960) (2,894) (2,342) (1,489) (4)

Deficit / GDP Ratio 13.01% 9.22% 8.61% 13.49% 10.16% 10.10% 8.48% 7.37%

Debt Service / GDP Ratio 16.33% 12.43% 10.88% 13.47% 13.08% 12.16% 11.56% -10.51%

Net Public Debt ($ Billion) 31.36 32.98 34.76 37.42 39.02 41.50 44.11 45.01 46.35 48.35 (6)

Gross Public Debt/GDP Ratio 168.50% 167.00% 175.70% 179.90% 167.80% 162.50% 146.46% 133.99% 129.38%

M ONETARY AGGREGATES & INFLATION

M4 ($ Billion) 46.63 49.63 51.59 56.08 63.56 72.58 87.08 97.31 103.5 109.54 (7)

(M2-M1) ($ Billion) 15.51 15.22 14.27 13.37 14.11 21.93 31.14 35.66 36.39 39.23 (7)

Monetization Level (M2/GDP Ratio) 87.90% 80.27% 74.24% 69.39% 65.76% 85.55% 97.95% 100.20%

change in CPI (%) 3.00% 1.70% -2.60% 5.60% 9.30% 6.36% 4.20% 6.19% 4.27% 10.3% (8)

BANKING SYSTEM

Number of Commercial Banks 52 53 54 54 54 53 53 54 54

Number of Branches 809 799 825 830 847 860 885 912 948

Total Assets ($ Million) 59,895 67,786 70,325 76,179 82,255 94,255 115,250 128,925 140,576 149,375 (6)

Total Deposits ($ Million) 49,362 55,835 58,117 61,541 68,059 78,663 96,821 108,601 117,703 125,006 (6)

Loans to the Private Sector ($ Million) 14,929 15,934 16,230 17,201 20,425 25,039 28,374 34,929 39,375 42,726 (6)

Customer Loans/ Deposits 30.24% 28.54% 27.93% 27.95% 30.01% 31.83% 29.31% 32.16% 33.45% 34.20%

Dollarization Rate 65.02% 68.78% 71.71% 75.16% 77.34% 69.57% 64.46% 63.24% 65.92% 64.72%

Net Profit - After Tax ($ Million) 448.30 463.42 580.47 753.51 961.99 1,214.81 1,428.92 1,837.56 1,743.28

Exchange Rate (LBP to USD) 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50

Recap of Lebanon's Major Indicators

* Figures Reflect IM F Estimates

(1) As At End of June 2011, (2) As At End of June, 2012, (3) As At End of July, 2012, (4) As At End of August, 2012, (5) As At End of September, 2012, (6) As At End of October, 2012, (7) As At December 6, 2012

(8) As At End of November, 2012

LLEEBBAANN

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Weekly Market Watch

SOURCE: MOF, MOODY’S, CAPITAL INTELLIGENCE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 16

Rated Banks

Long Term

Foreign

Currency

Financial

Strength

Outlook Long Term

Foreign

Currency

Outlook

Bank Audi-Saradar B1 D- Negative B Stable

BLOM Bank B1 D- Negative B Stable

Credit Libanais - - - B Stable

Byblos Bank B1 D- Negative B Stable

BBAC - - - B Stable

Fransabank - - - B Stable

Bank of Beirut B1 D- Negative - -

Sources: Moody's Investors Service, Capital Intellgince

Lebanese Banks' Latest Ratings

Capital IntelligenceMoody's Investors Service

Rating Agency Tenor Rating

Long-term B

short-term B

M oody's Investor Services Ltd Long-term B1

Fitch IBCA Ltd Long-term B

short-term B

Source: M inistry of Finance: Debt & Debt M arkets Reports, M oody's Investor Services, Standard & Poor's

NegativeStandard & Poor's

Republic Of Lebanon Sovereign Ratings

Outlook

Stable

Stable

Stable

s

CONTACTS

RESEARCH Fadlo I. Choueiri, CFA [email protected] 961-1-200 028 EXT: 235 Jad Abi Haidar [email protected] 961-1-200 028 EXT. 251 Rim Fayad [email protected] 961-1-200 028 EXT. 230 Joelle Samaha [email protected] 961-1-200 028 EXT. 232

Jessica Basbous [email protected] 961-1-200 028 EXT. 275

MONEY MARKETS DESK Robert Araman [email protected] 961-1-200 028 EXT. 116 FX DESK Christian Hajjar [email protected] 961-1-200 027 CAPITAL MARKETS DESK Gaith Mansour [email protected] 961-1-322 191

This document is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. This document does not constitute an offer or invitation to subscribe to or purchase any security, and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever.

Reasonable care has been taken to ensure that the facts stated herein are accurate and the estimates, opinions and expectations contained herein are fair and reliable.

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Weekly Market Watch


17

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