The Lebanese Central Bank’s quarterly bulletin shows some 11.44% contraction in the net value of the securities portfolio on the books of the Lebanese financial sector (banks and financial institutions) during the first quarter of the year 2021 to LBP 1,833.5 billion ($1.22 billion), from LBP 1,914.3 billion ($1.37 billion) at year-end 2020. On an annual basis, the net value of securities portfolio held by the financial sector plunged by 15.02% from     LBP 2,157.7 billion ($1.43 billion) at end of March 2020. In details, the value of equity securities, which constituted 68.27% of the Lebanese financial sector’s net securities portfolio, contracted by 11.79% year-to-date yet increased by 3.78% annually to LBP 1,251.8 billion ($0.83 billion). Concurrently, long-term debt securities, which represented some 31.64% of the sector’s net securities portfolio, fell by 10.71% since the beginning of the year and by 38.52% y-o-y to LBP 580.1 billion ($0.38 billion).

Medium & long-term banks controlled the lion’s share (32.59%) of the financial sector’s placements in equity securities, followed by commercial banks (28.85%) and financial institutions (21.87%). Commercial banks detained the largest stake (37.97%) of the financial sector’s placements in long-term debt securities, trailed, and by far, by insurance companies (30.43%) and medium & long-term banks (22.16%).

From an asset allocation standpoint, the Lebanese financial sector’s securities portfolio was majority concentrated in U.S. equity instruments (30.58%), U.S. long-term debt securities (17.47%), and U.K. short-term debt securities (58.82%). The allocation of the investment portfolio by type of instrument across other countries at end of March 2021 is sketched in the table below: