Monday, May 21, 2007
BEIRUT (Zawya Dow Jones)- Lebanon's jittery financial markets and fragile economy Monday faced new worries from fighting that erupted over the weekend between the Lebanese army and militants in the northern city of Tripoli.
The Beirut Stock Exchange's main BLOM index dropped 1.5% Monday with most stocks in the small bourse closing down.
Real-estate firm The Lebanese Company for the Development & Reconstruction of Beirut Central District, or Solidere, paced the trend with drops of 3.1% and 4.4% to $15.76 and $15.75 respectively for its two share classes. "The market is completely correlated with the security situation," Nancy Elias from brokerage Financial Funds Advisors in Beirut told Zawya Dow Jones in a phone interview.
Imad Saab of investment firm Fidus Societe Generale said that the security situation affected the market but investors have not panicked in hopes for a quick end to the confrontations in northern Lebanon.
"If insecurity persists for a long time, then it will definitely have a negative impact on the market, and then all shares will experience a downtrend and not just Solidere," Saab said.
Solidere shares accounted for 90% of the Monday trading volume on the BSE.
Of other major shares, Banque Audi GDR fell 1.5% to $63.65, while BLOM Bank GDR held their ground with a 0.4% gain to $72.75.
Battles between the army and militants from the Fatah al Islam group continued Monday around the Nahr al-Bared Palestinian refugee camp.
A Sunday night car bomb rocked the area around the ABC Mall in the Achrafieh district of Beirut. The blast killed a 63-year-old woman and wounded 12.
Analysts are concerned the latest fighting in a country beleaguered by external and internal unrest will spell new trouble for the Lebanese economy, which is weighed down as one of the world's most indebted nations.
"People and investors are not so comfortable to invest in a country that is so unstable on the political and security levels," said Elias.
By Maria Abi-Habib and Cynthia Darrous, +961 1 985 757, Maria@zawya.com, cynthia@zawya.com
Copyright (c) 2007 ABQ Zawya Ltd. and (c) 2007 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
21-05-07 1535GMT
