Solidere stocks fluctuate as Beirut Stock Exchange resumes trading after explosion

Lebanon’s stocks fluctuated yesterday in the first trading session after last week’s catastrophic Beirut port explosion, with the largest listed company Solidere gaining some ground before the close.

The Class A shares of the property developer, which fell as much as 11.6 per cent during the day, ended trading 0.49 per cent higher at $14.28 while its Class B shares fell by 1.17 per cent to $14.33 (Dh52.63).

Nabil Rantisi, general manager for wealth management at Dubai’s Daman Investments, said the drop “is definitely related to the explosion and the uprising, [it is] reflective of the collective situation in Lebanon”.

However, “it is not a very liquid market” and small volumes can affect prices, he said.

“It is only logical to see their stock declining,” Mr Rantisi said, given that the company rebuilt Beirut’s city centre after the end of the 15-year civil war in 1990 and many of its assets were severely damaged by the explosion.

“The volume is low and nobody is interested [in selling or buying] anyway, because people are on an another level ... they have no homes. Some investors are not even looking at the market,” said an executive who is head of equities at a large Lebanese bank.

The August 4 explosion, blamed on 2,750 tonnes of ammonium nitrate that was stored at a port warehouse, killed more than 150 people and wounded more than 6,000.

It damaged about 90,000 homes and left more than 300,000 people homeless.

Beirut’s governor Marwan Abboud said the financial cost of the damage could be as high as $15 billion (Dh55bn). However, a precise assessment has yet to be made.

The devastation raises questions about Solidere’s future revenue and Mr Rantisi said “they still have tenants, but are they going to pay rents?”

He said Solidere’s earnings are dependent on the country’s economic situation at large and the financial impact of the blast.

Lebanon’s economy was expected to contract by 12 per cent this year before the latest incident, according to the International Monetary Fund.

Solidere was the most actively traded stock on the bourse. Investors have in recent months piled into Solidere as its shares became a hedge for traders against the country’s plunging currency and surging inflation.

The stock has risen by 144 per cent since last October.