Lebanon puts itself back at the hub
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Lebanon puts itself back at the hub

A series of recent reforms has raised hopes that the capital markets will have a bigger role to play in Lebanon’s economic story. But is it another false dawn? James Featherstone reports.

Still no date for crucial donor conference

By James Featherstone

former Lebanese prime minister Rafik Hariri
The assassination in February 2005 of former prime minister Rafik Hariri seriously set back the Lebanese markets and wider economy

A SENIOR INVESTMENT banker in Beirut is not sanguine about reform in Lebanon. “If you wanted to make all these reforms happen quickly and easily, you wouldn’t start from where we are now,” he says. Lebanon’s recent history being what it is, that is unarguable. But capital markets reform and economic improvement are both happening. The question is, are they happening fast enough and with sufficient consistency? The most recent Lebanese sovereign bond issue, a $2.628 billion Eurobond in mid-April, seems to show that the answer to both questions is yes – or at least that foreign investors are prepared to be patient in the meantime. Despite the last-minute hiccup of two recalcitrant telecoms companies blowing open a festering dispute with the government, the non-cash portion of the deal went ahead smoothly. “There was little impact,” commented a banker involved in the April deal; indeed foreign investors stuck with it and formed a higher proportion of buyers – they bought some 70% of the 15-year portion – than has been the case for Lebanese debt in years.

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