Innholdsfortegnelse for September 2017 i Lebanon Opportunities

SPREAD NARROWS BETWEEN LIRA AND DOLLAR LENDING RATES The spread between the Beirut Reference Rate (BRR) on lending in lira and the BRR on lending in U.S. dollars has narrowed by 27 percent since January 2016. The spread is currently at 1.87 percent, as per the rates set by the Association of Banks (ABL) for September 2017. The margin between the two rates has been slowly decreasing over the period due to the moderate rise in the BRR on lending in dollars. The BRR for lending in liras was fairly stable during the period. The increase in the dollar BRR followed rising global interest rates on the dollar. “The rising interest rates on the dollar will increase demand for loans in liras,” said Mazen Soueid, Chief Economist at BankMed. This…

Links: Click this article’s entry in ‘Table of Contents’ on our website A high number of university graduates enter the job market annually. But the market – both private and public institutions – is often unable to create the required number of jobs. On average, it is taking fresh graduates under one year to find a job, but not all find work in their specialty. The labor market is calling out for professionals with new skill sets. Universities try to meet the demand through the creation of varying specializations and adding elements to the curricula. There is a sizeable employment gap between men and women, and this widens with age. EMPLOYMENT AND UNEMPLOYMENT The labor force has been growing rapidly. The number of people able to work was 1.5 million…

Links: Click this article’s entry in ‘Table of Contents’ on our website Housing Bank will triple its loans in 2017 Housing loans, which stood at around $12 billion at the end of last year, account for 20 percent of banks’ claims on the private sector, according the Central Bank (BDL). Outstanding housing loans have continued to increase over the last six years, albeit at a decreasing rate. Signs of a recovery are emerging. Substantial cuts in interest rates on subsidized loans took place earlier this year. Joseph Sassine, Chairman of Housing Bank (Banque de l’Habitat or BDH), said slashing the interest rate boosted demand for the bank’s loans. “We expect the loans granted in 2017 to reach more than LL500 billion ($332 million) which is 3.5 times their value in…

TENDER FOR POWER BARGES TERMINATED The Cabinet has terminated the tender for two additional power barges with a capacity of 425 megawatts (MW). The Department of Tenders will launch the tender again, after receiving amended terms of reference from the Ministry of Energy and Water. Jean Ellieh, Director-General at the Department said, “Only one bidder, Karadeniz, applied for the tender. By law, there should be at least two competing companies.” Karadeniz, a Turkish firm, is currently providing electricity through two power ships, Fatmagul and Orhan Bey. “The terms of reference should be amended in a way so more competitors can participate in the tender,” Ellieh said. According to Ellieh, when the first tender was launched, around 50 companies purchased the terms of reference, and eight bidders participated in the tender.…

Competition requires LCAs to continually modify their business model Links: Click this article’s entry in ‘Table of Contents’ on our website Low-cost airlines (LCA) are eyeing the local market. More such carriers serve Beirut airport, and others are studying this possibility. The official ‘open skies’ policy is encouraging them to do so, even though our sky is much less open than other markets. Local travel agents are also looking at ways to help regional LCAs serving Beirut airport to achieve a higher market share. There are still opportunities to increase this share even further. Globally, and locally, lowcost airlines are witnessing constant changes in operations, services, and pricing criteria. This is due to normal competition with other carriers. The introduction of business class and a variety of free and paid…

Links: Click this article’s entry in ‘Table of Contents’ on our website In the absence of an official national census, there have been multiple and sometimes very different population estimates over the years. The latest credible estimate, issued by the Ministry of Public Health (MoPH) in 2015, was 4.292 million people. This figure only took into account the Lebanese population living in the country. It differs from figures issued by the United Nations and the World Bank, which include Palestinian and Syrian refugees, and other foreigners. Their counts hover around 5.9 million. Related Ministries and the Central Administration of Statistics (CAS) have conducted several partial population surveys. According to Robert Kasparian, former Director-General of the CAS and consultant for the ongoing national accounts project, there are concerns about the different…

VOLVO DEALERSHIP SOLD Emile Eid recently increased his stake in the Volvo dealership from 20 percent to 96 percent by acquiring the shares of former partners Marwan Naffi and Fadi Daouk. The remaining minority shares have been split between Daouk and Michel Mimas. Eid, who also owns shares in Volvo Jordan, first invested in the local automotive industry in December 2015 after acquiring a 20 percent stake in the Volvo dealership from Naji Gabriel Abou Adal. Naffi said the agency’s sales almost doubled between 2013 and 2016. According to the Association of Car Importers, Volvo sold 243 passenger vehicles and trucks last year compared to 213 (2015), 100 (2014), 126 (2013), and 68 (2012). Sources close to the deal estimated the agency’s turnover to be between $17 million and $20…

Links: Click this article’s entry in ‘Table of Contents’ on our website The reduction in ADSL subscription fees announced by the Government in June has finally trickled down to Internet Service Providers (ISPs) and consumers. ISPs have amended their subscription plans, which has resulted in reduced tariffs or increased data capacity and Internet speed. Further price reductions for additional products and services have been announced, and the number of landlines has increased. FINAL APPROVAL In June, the Cabinet decided to reduce Internet subscription charges. This was made possible by reducing the monthly fee of an E1 Line from $240 to $110. An E1 Line is a high-speed digital link that connects the private automatic branch exchange (PABX) (the telephone exchange operated by the service provider) to the Ministry of Telecommunications…

Links: Click this article’s entry in ‘Table of Contents’ on our website Universities are putting more effort into improving their business education offerings. The faculties review curricula with international partners and professors every few years to improve existing courses and introduce new ones. Teaching through practical experience as well as theory is becoming more of a priority than ever. Universities are signing internship agreements with companies in order to train students. They are using market feedback to fill labor gaps and match their needs. New master’s and executive master’s specializations designed to address market needs are in the pipeline. BUSINESS ENROLLMENT Demand for business majors is growing annually. According to Maya El Helou, Director of Graduate Programs at the Olayan School of Business at the American University of Beirut (AUB),…

In the absence of money metric figures that identify real changes in income and purchasing power, indicators such as GDP per capita, housing, health, education, and income-related criteria are key to studying changes in household living conditions. The World Bank categorized the country as of upper middle income status with per capita GDP at $11,271 in 2016. According to Kamal Hamdan, Managing Director of the Consultation and Research Institute, the concept of living conditions and standards has changed. This is obvious when considering the services and amenities available to households over the last two decades. He said that extensive studies are still needed to quantify any improvement in the level of household income, expenditure, and purchasing power. Family structure has a direct impact on living conditions. The Central Administration of…

Links: Click this article’s entry in ‘Table of Contents’ on our website Nearly all children have access to primary education. But enrollment rates decrease for secondary and tertiary education as a high percentage of young people move to the job market, as a result of their lack of resources. Public schools that cater to low income families are found across the country. The Ministry of Education and Higher Education (MoEHE) works to improve the curriculum and the quality of education. Some public secondary schools can compete with private schools. But overall, the private sector is still dominant, offering generally higher quality education, and the use of modern technologies, laboratories, and workshops. Among private schools, the most expensive are those that offer the best in quality, which results in a disparity…

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