Activity on the Lebanese stock market showed mixed results during the fifth month of 2022, with volume traded dropping by 21.89% to 1,659,677 shares, compared to 2,124,884 shares in April. On the other hand, value traded expanded by 83.20% month-on-month to $55.62 million, from $30.36 million a month earlier. Trades mainly consisted of real estate (63.26%), banking (35.40%) and industry & trading (1.34%) stocks. The market capitalization of listed companies soared by 39.50% month-on-month to just above $14.77 billion and came in 61.03% higher than the $9.18 billion reading reported in May 2021. The monthly increase in the market capitalization mainly owes to the sizeable appreciation in the prices of heavy market capitalization-weighted stocks, namely Solidere “A” (69.29% monthly increase) and “B” (68.55% rise) shares as investors flocked to purchase Solidere shares in fear of a haircut on deposits in the event the government’s financial sector recovery plan is implemented.

Similarly on a cumulative basis, the number of shares changing hands on the BSE plunged by 52.27% year-on-year to around 7.28 million shares during the first five months of 2022, while value traded rose by 2.99% annually to about $136.86 million. As far as trading multiples are concerned, the weighted average Price to Book Value (P/BV) multiple of listed stocks ended the fifth month of 2022 significantly higher at 4.551x from 2.490x in April, noting it stood at 1.336x in the same month in 2021 at a time when the prices of Solidere “A” and “B” shares were trading at $24.83 and $24.98 respectively.

Overall, trading activity was thinner in May 2022, as evidenced by the decrease in the turnover ratio (being the number of shares traded divided by total listed shares) to 0.08%, down from 0.11% in April. The turnover ratio also fell to 0.37% by end of the first five months of this year, compared to 0.78% in the same period last year as investors remained on the sidelines awaiting some glimmer of hope regarding Lebanon’s reform journey.