Innholdsfortegnelse for December 2016 i Lebanon Opportunities

$1 BILLION MORE IN STIMULUS FROM CENTRAL BANK The Central Bank (BDL) has approved a new stimulus package of LL1,500 billion ($1 billion) for 2017, according to BDL’s intermediate circular 444. The package consists of soft loans to banks at an interest rate of one percent. The package brings the amount of money injected in the economy under BDL’s stimulus program to $5.4 billion. The program was first launched in 2013 and aims to boost lending at low interest rates to the private sector, mainly for small and medium enterprises (SMEs). Tourism, agriculture, industry, information technology, environment, housing, education, and innovation are being targeted. BDL set an upper limit of $600 million for dedicated housing loan credit facilities of banks as part of the 2017 stimulus, according to the…

The information and communication technology (ICT) sector is the fastest growing segment of the economy. The ICT market is expected to reach $436.2 million in 2016, up 14 percent compared with 2014, according to ‘Investment Opportunities in the ICT Sector-2016’, a report published by the Investment Development Authority of Lebanon (IDAL). A high proportion of ICT companies are looking to markets abroad. The market itself is evolving into innovation and content generation. The sector is being supported by the Central Bank. FUTURE GROWTH RATES Hardware sales are estimated to have grown 12 percent to $262 million during the period 2014-2016. They account for 60 percent of the ICT market. The market is expected to grow at a CAGR of 9.7 percent to $543 million by 2019. ICT services are estimated…

Donors had by the end of August 2016 readied $1.57 billion in response to Syria. Of which more than $1.2 billion has already been disbursed or is committed to use. This is according to the United Nations Office for the Coordination of Humanitarian Affairs (OCHA). Wissam Harake, Chief Economist at the World Bank, said the inflow of refugees into the country is the source of small yet positive GDP growth. Financial donations benefit several economic sectors and help to generate jobs. UNICEF spent $230 million last year. Luciano Calestini, Deputy Representative of the Organization, said that 78 percent of each dollar spent on refugees during 2015 was injected into the economy, and that the crises presented the economy with good prospects. THE LEXICON OF AID The different terms that international…

The property market is regaining momentum in some segments. Demand shows signs of improvement in some Beirut districts but remains stable in others. Districts of the capital that were once seen as strongholds of the property market are slowing down. Price disparity across the suburbs has lessened and the demand for smaller apartments has increased. InfoPro, which has been researching and recording the evolution of real estate prices since 2003, has compiled data related to the supply and demand of residential units in Beirut and the suburbs. GENERAL INDICATORS The property market is witnessing a more positive outlook, according to official real estate statistics. The first eight months revealed a moderate two percent increase in transaction numbers compared to the same period in 2015. Nabil Gebrael, member of the board…

$300 MILLION IN HOSPITALIZATION ALLOCATED A recently issued Cabinet decree has allocated around $300 million per year to cover hospitalization fees of patients to be treated at the expense of the Ministry of Public Health (MoPH). This is an increase of around eight percent compared to 2014. Around $86 million will be allocated to 34 public hospitals, and $182 million to 127 private hospitals, private long-stay medical elderly homes, and specialized treatment centers. The services to be provided are based on contracts signed between the MoPH and each hospital. The amounts are based on the budget draft law for 2016. Some $34 million will be provided to hospitals specialized in chronic diseases, mental and physical disabilities, pulmonary diseases, intense care, psychiatric illness, and radiology, among others. The hospitals chosen are…

GDP GROWTH TO ACCELERATE INFLATION TO FOLLOW DEFLATION NONRESIDENTS’ CONFIDENCE TO IMPROVE The recent election of the new President is predicted to help change the country’s fortunes for the better. This minimal political consensus is expected to reinforce consumer confidence and strengthen investment and deposits growth, and improve tourism. Real GDP growth is expected to accelerate next year. Deflationary pressures persist, consumer prices have decreased, but headline inflation is expected to increase next year. Pending issues still need to be tackled to help sustain long-term growth. Reform measures could help in addressing the recurrent fiscal deficit and attenuate the high debt-to-GDP ratio. ECONOMIC COMFORT Most rating agencies and financial institutions agree that the recent election of a President bode well for the economy. Bank Audi’s quarterly report said: “The domestic…

Two programs by UK Lebanon Tech Hub (UKLTH) are expected to be launched in March 2017. The programs target supporting research and development (R&D), and opening up new markets. The programs will run with the support of the Central Bank (BDL). Nadim Zaazaa, MENA and US Director of UKLTH, said that the first program is an international R&D program. It will connect multinational research centers with local universities, SMEs, and tech startups. According to Zaazaa, there are three pilot projects within this particular program: Agri-tech, biotech, and laser speckle. The projects are being partnered by three international partners: CERN, Italian University Unisanno, and the University College of London. “We hope to get six other projects by next March,” said Zaazaa, who believes that “The program will spin out the next…

The biggest and most expensive financial operation in the country’s history: Around $14 billion by the end of November according to some accounts, maybe even a bit more according to other sources. This positions the volume of the operation ahead of the combined proceeds from the Paris II and Paris III conferences. But this series of parallel transactions is shrouded in mystery. It was de rigueur for the Ministry of Finance, the Central Bank (BDL) and commercial and investment banks to produce fanfares and self-congratulatory statements at every successful – often routine – Eurobond issue. Most of these previous issues ranged from $400 million to $2 billion. The refrain was always to interpret the successful closing of the issue as a testimonial to the resilience of the economy, trust in…

$1 BILLION REAL ESTATE COMPANY TO BE LAUNCHED A real estate company with a capital of $1 billion is expected to be launched in the first half of 2017 by Massaad Fares and Namir Cortas. The company will buy and sell built real estate properties under the directives of Intermediate Circular 427, issued by the Central Bank (BDL) earlier this year. The capital of the new firm will be raised through a collective investment scheme (fund). Med Securities has been appointed as the leading placement agent. Subscriptions will be carried out through local banks, Fares said. Mohamed Alem, Senior Partner at law firm Alem & Associates, said that this kind of funding is the ideal investment instrument for large conglomerates and institutional investors that sit on big amounts of cash.…

BALANCE OF PAYMENTS SURPLUS The net surplus in the balance of payments for the first eight months of 2016 was $366 million. This was the result of a 37 percent jump in financial inflows that have offset a ten percent widening in trade deficit. Financial inflows surged to $11.2 billion in the first eight months of 2016 from $8.2 billion in the same period last year. The balance of payments recorded a substantial surplus of $1.8 billion in August resulting from the financial engineering operation of the Central Bank (BDL). BDL’s financial engineering activity consisted of a swap operation with local banks worth $10 billion. The swap increased BDL’s foreign reserves and was a lucrative deal for the banks. The balance of payments has been reporting deficits since 2011. This…

Many small, medium businesses (SMEs) rely on their team to perform human resource (HR) tasks. More recently there has been a move toward hiring a specific HR officer to help improve staff skill levels, motivation, and to help retain employees. The HR department of these small companies is formed along similar lines to those found in larger ones and is helping to increase a company’s profitability. An option remains for some SMEs to save costs and manpower by calling on the services of HR consultancy firms for internal and external support systems. GROWING HR ROLE Employee efficiency is the driver behind the growth of HR departments within SMEs. Fierce competition is another factor. Small businesses have had to find a way to survive. “The business world is developing rapidly. Companies…

The travel insurance sector is growing. Local assistance services are being positively affected by the fact that companies and international organizations are insuring employees traveling to the country. Local insurance companies have rapidly developed this service through networking with world-renowned assistance companies and reinsurers to provide a comprehensive portfolio of client services at acceptable cost to end users. FIERCE COMPETITION The travel insurance sector has expanded at impressive rates. This is due to the rising number of locals traveling abroad, the displaced Syrians who are able to travel to Europe for tourism, and the banks offering travel insurance to clients who use bank cards to pay for trips. Bank cards exceeded 2.7 million by the end of September. Competition among banks to offer better benefits to clients is fierce.…

The findings of two recently launched indices by InfoPro – Residential Real Estate Price Index and Residential Real Estate Inventory Index – reveal the health of the housing market. The indices track the evolution of prices and apartment inventory of new residential stock across five cazas. In response to changing demand, some active developers in Beirut have expanded their operations to other areas. Others are offering additional payment facilities. Areas such as Hazmieh are holding up. Developers in Aley are creating concepts that were previously unavailable. Homebuyers looking for apartments in Beirut are now either willing to live in very small units or move out of prime real estate areas like Ashrafieh and Ras Beirut. Kesrouan has the lion share of transactions, although sales are down from previous years. Developers…