The Business Year

Dr. Ghaleb Mahmassani

LEBANON - Finance

For Worse, For Better

Vice-President, Beirut Stock Exchange (BSE)


Dr. Ghaleb Mahmassani first joined the BSE in 1999. An attorney and legal counsel since 1962 and an international arbitrator since 1976, he is a member of the National Committee of the Permanent Court of Arbitration at The Hague (The Netherlands). He also served as a member of the International Court of Arbitration at the International Chamber of Commerce (ICC) in Paris from 2000 to 2005. Widely published at academic and professional levels, he received law degrees from Saint Joseph University-Beirut, a degree in political science from the American University of Beirut, and a PhD in law from the University of Lyon.

TBY talks to Dr. Ghaleb Mahmassani, Vice-President of the Beirut Stock Exchange (BSE), on the pace of the privatization of the BSE, the sharp increase in trading movement in 2016, and how to change the business culture in Lebanon for the better.

What factors led to the 60% increase in trading in 2016?

Despite ongoing events in the region, in 2016 the BSE ended the year with a sharp improvement in the volume and value of traded instruments. This may be viewed in part as a reflection of renewed confidence in the country following positive political developments. In fact, market activity at BSE witnessed a sharp increase in trading movement in 2016. Cumulative trading during 2016 totaled 120.5 million shares valued at USD971.6 million, compared to 74.6 million shares for a value of USD628.9 million in 2015. This represents an increase of 62% and 55%, respectively, on the volume and value of shares traded.

How is the privatization process of BSE progressing?

Currently, this is the most interesting topic related to BSE. We drafted the final version of the articles of association of the new company in conjunction with the Capital Market Authority and submitted it to the Ministry of Finance, which made some remarks that should be taken into consideration. Once the Council of Ministers approves the articles of association and appoints a Founders Committee (board of directors) of the new stock exchange, the process of transforming the current official bourse into a joint stock company will begin. The new board of the stock exchange will work within one year to privatize BSE by drafting the rules of privatization. It is important to mention that the Financial Market Law does not state the exact type of privatization that the bourse should go through or whether the government will hold a golden share in the new company.

Will people be more encouraged to trade once the BSE becomes private?

Of course, since a private company does not work like a public company. A private company will be more business oriented, promote itself, and act more vigorously to support its business. However, the privatization of the stock exchange by itself is not the only step necessary to promote and develop the financial market in Lebanon; we need a series of steps that should be done harmoniously in order to change the culture of the Lebanese businessmen and the public in general.

How is the BSE working to increase awareness about capital markets and the benefits of trading their shares?

The BSE Committee is trying to increase awareness about the importance of capital markets by giving attention to educational and promotional programs that aim to attract and convince medium-sized Lebanese companies to list their shares on BSE and to increase their capital through the broadening of the shareholders base by highlighting the importance and advantages of financing through the stock exchange.

What are your expectations for the economy and the BSE going forward?

It is my sincere hope that we will witness further progress in the Lebanese economy during 2017 that will boost BSE’s activity and its reputation further. I am confident that the election of the new president and the appointment of a new government will give boost to the Lebanese economy, mainly if followed by an election of new parliament. However, this political improvement should be followed by real reform in all sectors in order to fight against bureaucracy and corruption.

What are your main goals for 2017?

The BSE is currently in a transitory period as the Lebanese Parliament endorsed the new capital market law that takes into consideration the privatization of BSE. So, the major achievement for this year will be the restructuring of the national exchange and to transform it from an official institution to a joint stock company, a preliminary step before privatizing it.



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