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Your Investment Reference
THE
LEBANON BRIEF
ISSUE 801
Week of 10 – 15 December, 2012
ECONOMIC RESEARCH DEPARTMENT
Rashid Karame Street, Verdun Area
P.O.Box 11-1540 Beirut, Lebanon
T (01) 991784/7 F (+961) 1 991732
www.blom.com.lb
S A L
The Lebanon Brief Table Of Contents Page 2 of 12
ISSUE 800; Week of 10 – 15 Dec, 2012
S A L
TABLE OF CONTENTSTABLE OF CONTENTSTABLE OF CONTENTSTABLE OF CONTENTS
FINANCIAL MARKETSFINANCIAL MARKETSFINANCIAL MARKETSFINANCIAL MARKETS 3333
Equity Market 3
Foreign Exchange Market 5
Money & Treasury Bills Markets 5
Eurobond Market 6
ECONOMIC AND FINANCIAL NEWSECONOMIC AND FINANCIAL NEWSECONOMIC AND FINANCIAL NEWSECONOMIC AND FINANCIAL NEWS 7777
IIF Forecast Real GDP Growth Between 1% and 3.5% in 2013 Contingent To Wages & Security Levels 7
Airport Passengers Reach 5.46 Million by the end of November 7
Cleared Checks Reach $65B By November 8
Slight Improvement In Consumer Confidence Index In November 8
CORPORATE DEVELOPMENTSCORPORATE DEVELOPMENTSCORPORATE DEVELOPMENTSCORPORATE DEVELOPMENTS 9999
Bank Of Beirut Extraordinary General Assembly 9
FOCUS IN BRIEFFOCUS IN BRIEFFOCUS IN BRIEFFOCUS IN BRIEF 10101010
Tourism Sector: Developments Over The Year 10
This report is published for information purposes only. The information herein has been compiled from, or based upon sources we believe to be
reliable, but we do not guarantee or accept responsibility for its completeness or accuracy. This document should not be construed as a
solicitation to take part in any investment, or as constituting any representation or warranty on our part. The consequences of any action taken
on the basis of information contained herein are solely the responsibility of the recipient.
The Lebanon Brief Economic and Financial News Page 3 of 12
FINANFINANFINANFINANCIAL MARKETSCIAL MARKETSCIAL MARKETSCIAL MARKETS
Equity Market
Stock Market
14/12/2012 7/12/2012 % Change
BLOM Stock Index* 1,156.48 1,118.57 3.39%
Average Traded Volume 131,957 531,589 -75.18%
Average Traded Value 1,051,008 2,060,124 -48.98% *22 January 1996 = 1000
The Beirut Stock Exchange gained momentum this
week as the easing of political tensions encouraged
investors’ return to the markets after weeks of
reluctance. The market witnessed smaller daily
average trade volumes of 131,957 shares worth
$1,051,008 compared to 531,589 shares worth
$2,060,124 in the previous week noting that a cross
trade transaction took place on 80,000 shares of
Byblos Bank worth $122,400 during this week. This
led the BLOM Stock Index (BSI) to increase by
3.39% and close at 1,156.48 points, narrowing its
loss to 1.72% loss since year start. Market
capitalization increased by $299.78 million to end
the week at $9.14 billion.
The Lebanese Index outperformed the benchmark
indices as the MSCI Emerging Markets index added
2.09% to close at 1,042.56 points, S&P Pan Arab
Composite LargeMidCap Index increased by 0.3%
to reach 109.24 points, and the S&P AFE40 Index
increased by 0.22% to 53.94 points this Friday.
Regionally, Egypt’s Stock Exchange was the best
performer gaining 6.71%, followed by Kuwait’s
Stock Exchange earning 0.87%. Meanwhile, Abu
Dhabi’s stock exchange fell 2.32% as well as
Dubai’s stock exchange by 1.56%.
On the Beirut Stock exchange, the real estate sector
dominated capturing 58% of total traded value.
Solidere A jumped by 6.85% to close at $13.10 and
Solidere B increased by 6.59% to end the week at
$13.11 per share. On London stock exchange,
Solidere GDR shares gained 7.08% to $13.01.
Banking Sector
Mkt 14/12/2012 07/12/2012 % Change
BLOM (GDR) BSE $7.80 $7.80 0.00%
BLOM Listed BSE $7.63 $7.40 3.11%
BLOM (GDR) LSE $7.90 $7.70 2.60%
Audi (GDR) BSE $6.00 $6.00 0.00%
Audi Listed BSE $5.98 $5.60 6.79%
Audi (GDR) LSE $6.00 $6.00 0.00%
Byblos (C) BSE $1.58 $1.51 4.64%
Byblos (GDR) LSE $79.00 $79.00 0.00%
Bank of Beirut (C) BSE $19.00 $19.00 0.00%
BLC (C) BSE $1.90 $1.90 0.00%
Fransabank (B) OTC $28.00 $30.00 -6.67%
BEMO (C) BSE $1.89 $1.89 0.00%
Mkt 14/12/2012 7/12/2012 % Change
Banks’ Preferred
Shares Index *
$106.28 $105.80 0.45%
BEMO Preferred 2006 BSE $100.00 $100.00 0.00%
Audi Pref. D BSE $10.25 $10.25 0.00%
Audi Pref. E BSE $100.00 $100.00 0.00%
Audi Pref. F BSE $100.00 $100.00 0.00%
Byblos Preferred 08 BSE $101.70 $101.70 0.00%
Byblos Preferred 09 BSE $103.00 $101.70 1.28%
Bank of Beirut Pref. D BSE $26.00 $26.00 0.00%
Bank of Beirut Pref. E BSE $26.20 $26.00 0.77%
BLOM Preferred 2011 BSE $10.17 $10.17 0.00%
Bank of Beirut Pref. H BSE $26.19 $26.19 0.00%
* 25 August 2006 = 100
1050
1100
1150
1200
1250
Dec-11 Mar-12 Jun-12 Sep-12 Dec-12
BLOM Stock Index
HI: 1226.1
LO: 1104.42
The Lebanon Brief Economic and Financial News Page 4 of 12
ISSUE 800; Week of 10 – 15 Dec, 2012
S A L
Real Estate
Mkt 14/12/2012 7/12/2012 % Change
Solidere (A) BSE $13.10 $12.26 6.85%
Solidere (B) BSE $13.11 $12.30 6.59%
Solidere (GDR) LSE $13.01 $12.15 7.08%
In the banking sector, BLOM listed shares rose
3.11% to close at $7.63, Audi listed went up by
6.79% to reach $5.98, and Byblos gained 4.64%
to end the week at $1.58 per share. On London
stock exchange, BLOM GDR shares rose 2.6% to
$7.9.
Manufacturing Sector
Mkt 14/12/2012 7/12/2012 % Change
HOLCIM Liban BSE $15.00 $15.25 -1.64%
Ciments Blancs (B) BSE $3.26 $3.50 -6.86%
Ciments Blancs (N) BSE $3.30 $3.30 0.00%
The Preferred shares index increased slightly by
0.45% to close at 106.28 points with Byblos
preferred 09 shares increasing 1.28% to close at
$103 and BoB Preferred E shares rising by 0.77%
to end the week at $26.20 per share. Beirut
Preferred fund also went up by 0.49% to end the
week at $103.5.
Funds
Mkt 14/12/2012 7/12/2012 % Change
Beirut Preferred Fund BSE $103.50 $103.00 0.49%
BLOM Cedars Balanced
Fund Tranche “A” ----- $6,787.93 $6,763.77 0.36%
BLOM Cedars Balanced
Fund Tranche “B” ----- $5,140.57 $5,121.64 0.37%
BLOM Cedars Balanced
Fund Tranche “C” ----- $5,155.48 $5,137.13 0.36%
BLOM Bond Fund ----- $9,832.00 $9,837.15 -0.05%
In the industrial sector Holcim shed a further
1.64% to close at $15 and Ciment Blancs (B)
dropped 6.86% to reach $3.26 per share.
In general, the rally seen this week on the stock
market might persist at a slower pace or relieve,
for as long as investors continue to take
advantage of the relative security ease and the
advent of the year-end period to re-adjust their
portfolios holdings.
Retail Sector
Mkt 14/12/2012 7/12/2012 % Change
RYMCO BSE $2.20 $2.20 0.00%
ABC (New) OTC $33.00 $33.00 0.00%
Tourism Sector
Mkt 14/12/2012 7/12/2012 % Change
Casino Du Liban OTC $565.00 $570.00 -0.88%
SGHL OTC $7.00 $7.00 0.00%
The Lebanon Brief Economic and Financial News Page 5 of 12
ISSUE 800; Week of 10 – 15 Dec, 2012
S A L
Foreign Exchange Market
Lebanese Forex Market
14/12/2012 7/12/2012 %Change
Dollar / LP 1510.00 1511.00 -0.07%
Euro / LP 1972.56 1950.00 1.16%
Swiss Franc / LP 1631.85 1612.30 1.21%
Yen / LP 17.98 18.30 -1.75%
Sterling / LP 2431.75 2417.88 0.57%
NEER Index** 104.00 104.48 -0.46%
*Close of GMT 09:00+2 **Nominal Effective Exchange Rate; Base Year Jan 2006=100
**The unadjusted weighted average value of a country’s currency relative to all major
currencies being traded within a pool of currencies. The NEER represents the
approximate relative price a consumer will pay for an imported good.
Demand for the US dollars retracted on the local exchange
market, setting its range at $/LP 1,508 - $/LP 1,512 with a mid-
price of $/LP 1,510. Foreign assets (excluding gold) at the
Central Bank increased by a monthly 1.5% to $35.67 billion by
the end of November 2012, while the dollarization rate of
private sector deposits remained steady at 65% by the end of
October 2012 as opposed to 66% in December 2011.
Nominal Effective Exchange Rate (NEER)
The Euro strengthened by 1.16% this week against the dollar
following a stream of comforting news from the EU leaders’
summit in Brussels this week. In addition to releasing the long-
delayed 50 billion euro aid for Greece, EU finance ministers
finally approved the European Central Bank (ECB) to become
the supervisor of Eurozone banks, directly overseeing 150 to
200 banks and with the power to delve into all 6000 banks in
case of troubles. Though this is considered the first step
towards achieving the EU plan for banking union and single
regulation, next stages of negotiations appear to be more
complicated, a fact which along the disappointing German
manufacturing sector figures, have posed pressure on further
heightening of the euro by the end of the week. By Friday
December 14, 2012, 12:30 pm Beirut time, the euro closed at
€/$ 1.3085, up by 1.16% from a week earlier. Hence, the dollar-
pegged LP depreciated to €/LP 1,972.56 from €/LP 1950 last
week. The Nominal effective exchange rate (NEER) decreased
by a weekly 0.46% to 104 points, narrowing its year-to-date
performance to 5.05%.
Money & Treasury Bills Markets
Money Market Rates
Treasury Yields
14/12/2012 7/12/2012 Change bps
3-M TB yield 4.38% 4.38% 0
6-M TB yield 4.87% 4.87% 0
12-M TB yield 5.08% 5.08% 0
24-M TB coupon 5.84% 5.84% 0
36-M TB coupon 6.50% 6.50% 0
60-M TB coupon 6.74% 6.74% 0
14/12/2012 7/12/2012 Change bps
Overnight Interbank 2.75% 2.75% 0
BDL 45-day CD 3.57% 3.57% 0
BDL 60-day CD 3.85% 3.85% 0
Broad money M3 increased by LP 471B ($312M) during the
week ending November 29 to reach LP 156,389B ($103.74B).
Accordingly, M3 increased by 7.7% y-o-y and 6.69% from end
of December 2011. M1 rose during the week by LP136B
($90.22M) as money in circulation declined by LP9B ($5.97M)
and demand deposits grew by LP145B ($96.19M). Total
deposits (excluding demand deposits) increased by $221.36M
driven by the progress of deposits denominated in foreign
currencies by $161M, and a rise in term and saving deposits
in LP by LP91B ($60.36M). As for the dollarization rate of
broad money, it narrowed by 2 basis points on a weekly basis
to 58.17%. The overnight interbank rate stood at 2.75%
during the month of September, according to BdL.
In the TBs auction held on December 6, the Ministry of
Finance raised LP 364.317B ($241.67M) through the issuance
of Treasury Bills. Demand was mainly observed on the 6M bill
which captured 45% of total subscriptions. The 3M TB paper
accounted for 36% of total demand, while the 5Y papers took
the remaining 19%. The average discount rate for the 3M and
6M papers & the average coupon rate for the 5Y paper
remained unchanged at 4.38%, 4.87%, & 6.74% respectively.
93
95
97
99
101
103
105
107
Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12
The Lebanon Brief Economic and Financial News Page 6 of 12
ISSUE 800; Week of 10 – 15 Dec, 2012
S A L
Eurobond Market
Eurobonds Index and Yield 13/12/2012 06/12/2012 Change Year to Date
BLOM Bond Index (BBI)* 109.080 109.100 -0.02% -1.68%
Weighted Yield** 5.04% 5.07% -2 26
Weighted Spread*** 434 446 -12 28
*Base Year 2000 = 100; includes US$ sovereign bonds traded on the OTC market
** The change is in basis points ***Against US Treasuries (in basis points)
Lebanese Government Eurobonds
Maturity - Coupon
13/12/2012
Price*
06/12/2012
Price*
Weekly
Change%
13/12/2012
Yield
06/12/2012
Yield
Weekly
Change bps
2013, Mar - 9.125% 101.88 101.88 0.00% 1.56% 1.56% 0
2013, Jun - 8.625% 103.81 103.50 0.30% 1.83% 2.15% -32
2014, Apr - 7.375% 107.00 107.00 0.00% 2.05% 2.05% 0
2014, May - 9.000% 109.25 109.25 0.00% 2.20% 2.20% 0
2015, Jan - 5.875% 104.75 104.75 0.00% 3.50% 3.50% 0
2015, Aug - 8.500% 111.75 111.75 0.00% 3.79% 3.79% 0
2016, Jan - 8.500% 112.50 112.50 0.00% 4.16% 4.16% 0
2016, May - 11.625% 123.00 123.00 0.00% 4.31% 4.31% 0
2017, Mar - 9.000% 116.63 116.63 0.00% 4.66% 4.66% 0
2018, Nov - 5.150% 100.50 100.50 0.00% 5.05% 5.05% 0
2020, Mar - 6.375% 104.88 104.88 0.00% 5.55% 5.55% 0
2021, Apr - 8.250% 115.63 115.63 0.00% 5.85% 5.85% 0
2022, Oct - 6.100% 101.25 101.25 0.00% 5.93% 5.93% 0
2023, Jan - 6.00% 100.25 100.25 0.00% 5.97% 5.97% 0
2024, Dec - 7.000% 106.25 106.25 0.00% 6.25% 6.25% 0
2026, Nov - 6.600% 101.50 101.50 0.00% 6.44% 6.44% 0
2027, Nov - 6.75% 101.00 101.00 0.00% 6.64% 6.64% 0
• Mid Prices ; BLOMINVEST bank
The Lebanese Eurobond market continued to hold grounds this week, amidst precipitating events in the country that ended
with a marginal calm. The stock markets benefited from the easing situation while the Eurobonds prices mildly fluctuated
within normal ranges leading the BLOM Bond Index (BBI) to shed 0.02% closing at 109.08 points on Thursday. The
weighted yield on holding the Lebanese Eurobonds portfolio slightly backed 2 basis points (bps) to 5.04% while the spread
against the US treasury yields narrowed 12 bps with the latter peaking this week. In comparison, the JP Morgan emerging
markets’ bond index nudged down 0.03% this week.
In the US, treasury yields rose as the Federal Reserve announced the initiation of its stimulus plan, in which they will buy
treasuries at a pace of $45 billion a month starting 2013, while assuring that interest rates will remain near zero as long as
the jobless rate stays above 6.5% and inflation is no more than 2.5%. This comes after the expiration of Operation twist, a
$667 billion program in which the central bank had switched about $45 billion monthly of short-term treasuries for equal
amounts in long-term debt. Moreover, treasuries trimmed gains as pessimism renewed about the prospects of resolving
the fiscal cliff, overshadowing positive expectations about the US industrial production in November as well as the
Commerce Department good feels about the housing sector.
Regarding credit default swaps (CDS), the Lebanese CDS for 5 years widened to 419-451 bps from 417-437 bps last week.
Dubai CDS quotes further narrowed to 210-220 bps from 211-229 bps, while KSA’s remained unchanged at 70-75 bps.
Brazil’s CDS were quoted at 106-108 bps while Turkey’s tightened to 122-125 bps from 125-128 bps last week.
4.30%
4.80%
5.30%
5.80%
Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12
Weighted Effective Yield of Eurobonds
The Lebanon Brief Economic and Financial News Page 7 of 12
ISSUE 800; Week of 10 – 15 Dec, 2012
S A L
EEEECONOMIC AND FINANCIAL NEWS CONOMIC AND FINANCIAL NEWS CONOMIC AND FINANCIAL NEWS CONOMIC AND FINANCIAL NEWS
Lebanon: Selected Economic Indicators
2010 2011e 2012f 2013f
A B
Real GDP Growth, % 7 1.8 0.6 3.5 1.0
CPI Inflation, avg, % 5.3 6.0 5.4 5.6 6.3
Adjusted tourist arrivals, % ch 14.6 -12.4 -5.2 5.2 0.0
FDI, % GDP 11.5 8.8 2.6 4.7 2.4
Current account bal, % GDP -20.1 -13.1 -16.7
-14.8
-16.2
Official reserv, $ billion 31.5 33.7 35.4 37.1 32.7
Fiscal deficit, % GDP -5.7 -6.0 -7.4 -8.9
-11.4
Primary balance, % GDP 5.5 4.2 2.1 0.7 -1.8
Government debt, % GDP 142 136 137 133 141
Nominal GDP, $ billion 37.1 39.3 41.6 46.3 44.7
Source: IIF
IIF Forecast Real GDP Growth Between 1% and 3.5%
in 2013 Contingent To Wages & Security Levels
The Institute of International Finance (IIF) projected Lebanon’s real
GDP growth for 2012 at 0.6% in its published MENA Overview
report this week, stressed by the domestic political tensions and
security disorders, as well as external pressures related to Syria.
For year 2013, IIF produced two scenarios leading to a real GDP
growth forecast of 3.5% at best and 1% at worst. Scenario A
assumes the increase of public wages by $1 billion (2.5% of GDP)
instead of the proposed $1.5 billion, along with significant
improvements in tax compliance and within a context of a relieved
domestic security, in which case, real GDP growth is forecast to
attain 3.5% and fiscal deficit would slightly widen to 8.9% of GDP
from 7.4% in 2012. In a darker scenario B, IIF incorporates the full
wage increase of $1.5 billion, coupled with a deterioration in the
security situation that is assumed to cripple touristic revenues and
foreign direct investments. This would lead to a real GDP growth
forecast of 1% and a sharp widening of the projected budget
deficit to 11.4% of GDP. According to the IIF, the sustainable
growth factors in Lebanon include the banking sector, the stability
of remittances from the Lebanese diaspora and the continuous
growth of BdL’s foreign reserves (equivalent to 85% of GDP). The
vulnerability elements on the other hand, involve the deficits of the
current account and the fiscal budget, the high level of
indebtedness standing at 137% of GDP, and the transfers to the
deficient electricity company (EdL) which represent around 18% of
government’s expenditures.
Airport Passengers & % of Arrivals
Up to November, in millions
Source: Beirut Internation Airport
Airport Passengers Reach 5.46 Million by the end of
November
The number of airport passengers increased by 5% year-on-year to
5.46 million in the first eleven months of 2012, after having nudged
up by only 1.6% y-o-y to 5.2 million in the same period last year.
According to figures released by Rafic Hariri International Airport,
total arrivals up to November rose 3% y-o-y to 2.64 million
passengers, departures climbed 7.2% y-o-y to 2.77 million, while
the number of passengers making transitory stops at the airport
declined by 13.85% y-o-y to 45,943. In November alone, passenger
numbers dropped 12.4% from November 2011 to 412,595, as
arrivals and departures were respectively 16.35% and 7.63% less.
Transit passengers dropped by 64.5% from last year to 1,606.
3.67
4.55
5.12 5.20 5.46
48.8%
49.7%
49.3% 49.3%
48.4%
47.5%
48.0%
48.5%
49.0%
49.5%
50.0%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
2008 2009 2010 2011 2012
Airport Passengers % of Total Passengers Arriving
The Lebanon Brief Economic and Financial News Page 8 of 12
ISSUE 800; Week of 10 – 15 Dec, 2012
S A L
Cleared Checks’ Breakdown By Denomination
Up to November, in $M
Source: Association of Banks in Lebanon
Cleared Checks Reach $65B By November
The value of checks cleared by Banque du Liban slid by 0.94%
y.o.y to reach $65B up to November of this year as business
activity remains stagnant due to regional and domestic instability.
The number of cleared checks was 11.95M, 0.54% higher than the
same period last year. The value of checks denominated in foreign
currencies dropped by 2.6% y-o-y to $51.36B, while the value of
checks denominated in Lebanese pounds increased 5.88% y.o.y to
$13.64B. The dollarization rate of checks thus stood at 79%
compared to 80.37% recorded in November 2011. Moreover, the
value of returned checks dropped by 4.73% y-o-y to $1.38B,
representing 2.13% of the total value of checks. For the month of
November alone, the total value of cleared checks rose by 1.07% y-
o-y to reach $5.96B as the value of checks denominated in foreign
currencies advanced by 3.8% to $4.67B and checks denominated
in LP jumped by 23.4% to $1.28B.
Consumer Confidence Index Levels
In November
Source: ARA Marketing Research & Consultancy
Slight Improvement In Consumer Confidence Index In
November
The Lebanese Consumer Confidence Index (CCI) published by ARA
for Research and Consulting increased by 29% from last month to
settle at 85 points in November. This improvement was mainly
driven by the recovery of the security sub-index which increased by
36 points to close at 120. According to ARA for Research and
Consulting, the consensus is that the President’s active role in
pacifying political disputes coupled with visits from high profile
figures to the country have led people to feel a greater amount of
security. As for the confidence in the economy, people feel that the
current situation has not been improving noting that various
political and economic figures quoted growth between 1-2% for
this year. However, people’s economic outlook is more positive as
the economic expectation sub-index rose by 16 points to close at
62. Both current and expected personal income indices also
increased by 26 and 17 points respectively in hopes of a fruitful
end to the 14-week demand of public sector wage hikes. Finally,
the purchases of durables index increased by 20 points with
people’s spending patterns increasing as we approach the end of
year holidays. Even though the index has improved considerably
from last month, it still registered a 38% drop in comparison to last
year’s November.
.
8,516 10,058 12,241 12,879 13,638
39,983 40,513
49,545 52,741 51,362
2008 2009 2010 2011 2012
LBP USD
158
200
10493
85
2008 2009 2010 2011 2012
The Lebanon Brief Focus in Brief Page 9 of 12
ISSUE 800; Week of 10 – 15 Dec, 2012
S A L
CORPORATE DEVELOPMENTSCORPORATE DEVELOPMENTSCORPORATE DEVELOPMENTSCORPORATE DEVELOPMENTS
BoB Preferred Shares “D” Performance
Since inception
Source: Bloomberg
Bank Of Beirut Extraordinary General Assembly
The board of directors of Bank of Beirut SAL invited the bank’s
shareholders for an Extraordinary General Assembly meeting on
28/12/2012, at the company’s head office, to examine and approve,
among other subjects, the increase of BOB’s capital from LBP
/86,735,124,000/ to LBP /93,035,124,000/ through the redemption
of all of its preferred shares D, according to governing laws and
procedures. To note that the last trading day for the preferred
shares D on Beirut Stock Exchange will be Friday 21/12/2012.
$25
$27.15
$26
The Lebanon Brief Focus in Brief Page 10 of 12
ISSUE 800; Week of 10 – 15 Dec, 2012
S A L
FOCUS IN BRIEFFOCUS IN BRIEFFOCUS IN BRIEFFOCUS IN BRIEF
Tourism Sector: Developments Over The Year
2012 is near to its end and the economic slowdown in Lebanon is showing no sign of culmination. While consumption
levels are showing resiliency, backed by strong remittances, the main sectors of the economy are being heavily impacted.
Real estate and tourism are no exceptions. With a contribution to GDP estimated at $3.77 billion in 2011, the equivalent of
9.4% of total GDP1, the tourism sector is a heavy driver of the economy; and the slowdown in the sector is bringing in
repercussions on different grounds, including employment, investment, and consumption.
As of October 2012, the number of tourists visiting Lebanon fell by 15.9% y-o-y to a total of 92,640 visitors during the
month, a new yearly low, and a cumulative of 1.2 million visitors since the start of the year. While the decline occurred over
the whole year, it was mostly accentuated in the third quarter, when the number of tourists fell by an average of 13.2% y-o-
y, compared to only 5.2% y-o-y and 7.5% y-o-y over the first and second quarters respectively. This is mostly linked to the
escalation of security issues, which was marked by the assassination of top ranked chief security official Wissam Al Hassan,
and ongoing conflicts in the North area, which led visitors to stay away. That being said, Eid El Adha did not attract
expatriates, depressing further October’s figure.
The number of Arab tourists in Lebanon declined the most when compared to visitors from other nationalities. The drop of
the former reached 17% y-o-y up to October 2012, to a total of 396,531, the equivalent of 34% of total tourists in Lebanon in
2012; a share that remained flat when compared to 2011. European visitors were 7% y-o-y less in number over the
considered period, counting 384,658, the equivalent of 33% of total visitors to Lebanon in 2012; a share that has gone up
from 30% in 2011. Asian tourists dropped severely up to October, going down by 51% to reach 108,461 tourists; a share of
9% in 2012, down from 16% in 2011. The only increase in tourists came from American ones, with their number going up
by 2% over the considered period to 193,164 visitors, a share of 16% out of total tourists.
Among Arab tourists, Iraqis visitors made up 27% of the total up to October 2012, their number remained flat from 2011.
Jordanian visitors captured a 19% share over the period, but their number fell by 29% y-o-y since a year earlier. Saudi
Arabian visitors also fell by 29% y-o-y in number terms, but their share remained high at 17%. Egyptian visitors increased by
10% y-o-y, and were at 14% of the total, whereas Kuwaitis visitors, down by 29%, captured only a 9% share and tourists
from UAE fell by 33%, to a 4% share of the total.
While tourism followed a declining trajectory, the number of arrivals to Lebanon increased over the considered period. Up to
August 2012, arrivals were up 6.1% y-o-y, compared to a 12.5% decline in tourists. Arrivals posted a rise over every month
except in July, when they fell by 15%. The discrepancy in behavior between both variables, can be explained by the fact that
Lebanese expatriates, continued to fly into the country, contrary to tourists, driving up the number of arrivals.
1 According to the World Travel Tourism Council 2011
-40%
-20%
0%
20%
40%
60%
80% Number of Tourists Annual % change
The Lebanon Brief Focus in Brief Page 11 of 12
ISSUE 800; Week of 10 – 15 Dec, 2012
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Tourist spending followed suit the fall in the number of tourists and posted records annual decline during 2012. The number
of refund transactions in Lebanon2 dropped by 22% y-o-y over the third quarter of 2012, and the average value of spending
slid by 2% y-o-y. While this reflects a slowing tourism activity, the slower contraction in average spending indicates a
sustained increase in prices, especially of luxury products. The breakdown of spending shows that Arabs continue to be the
largest spenders in Lebanon, with Saudis accounting for 14% of refund transactions, followed by tourists from UAE with a
7% share, and tourists from Kuwait with a 12% share.
The hotels activity posted positive results, despite the strong slowdown in tourism. Hotel occupancy rates reached 63% up
to July 2012, compared to 56% a year earlier3, with the highest rate achieved in May, at 74%. Since then, the activity started
to slowdown and hotel occupancy rate reached 53% in July. The inflow of Syrian citizens fleeing the crisis in their country
are providing the boost to hotels activity, and helping maintain rental prices high, in spite of lower overall tourists. The
average rent per room stood at $205 during the period, making Beirut the 9th most expensive city in the region, compared
to an average of $180.8.
Looking ahead, Blominvest does not anticipate any major event that would shock the tourism sector within the next couple
of months. Tourists are estimated to fall by 16% y-o-y over 2012, a significant slowdown that would call for urgent political
stability to restore the sector and boost again the economy.
2 As published by Global Blue
3 According to a study conducted by Ernst&Young
The Lebanon Brief
Page 12 of 12
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Youssef Chahine [email protected]
Gaelle Khoury [email protected]
Marwan Mikhael [email protected]
