DESIGNING THE MARKET
TBY talks to Dr. Ghaleb Mahmassani, Vice President of Beirut Stock Exchange (BSE), on promoting diversification, the privatization of the BSE, and recent transformations of the capital market authority.

BIOGRAPHY
Dr. Ghaleb Mahmassani obtained a bachelor’s degree in political science from the American University in Beirut in 1962, with licenses in French and Lebanese law in the same year. He received his PhD in law from Lyon University in 1966. As well as being the Vice President of the Beirut Stock Exchange, he has been an Attorney at Law and Legal Counsel since 1962, and an Arbitrator since 1976, and has been active both academically and professionally at the international level. He served as a Member of the International Court of Arbitration of the International Chamber of Commerce (ICC) in Paris from 2000 to 2005.How would you evaluate BSE's operations during 2015?
The year 2015 witnessed relatively modest trading movement on the BSE. In the year's 241 trading sessions, 74.6 million shares were traded for a value of USD629 million, compared to 96.8 million shares valued at USD661.4 million for the year 2014. This represents decreases of 22.9% and 4.9% in the volume and value of shares traded, respectively. Total listed capitalization remained almost unchanged at the end of the year 2015 at the level of USD11.22 billion. Finally, the value of secondary public offering in 2015 decreased by 85% to reach USD80 million against USD521 million in the year 2014. This may be attributed to the political situation in the country and the large extent to which this situation is deterring administers to get involved in the BSE or for the already listed ones to come out with new activities.
Nearly 90% of companies listed on the BSE belong to the financial sector. How are you attracting companies from other sectors to diversify operations?
Diversifying the structure of listed companies on the BSE is one of the biggest challenges the stock market has been facing since its reopening 20 years ago. Lebanese businesses are in their vast majority small, family-owned firms that prefer to finance their activities through bank credit in order to keep control over their companies. These companies do not see the advantages of being listed on the stock exchange; clearly, they are more influenced by the banking culture and would rather prefer to go under bank's umbrella. On the other hand, almost all big companies are still owned by the state with no clear plan for privatization in the near future. We are trying to correct the current situation by giving increasing attention to educational and promotional programs that aim to attract and convince medium-sized Lebanese companies to list their shares on the 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. We need first to recognize the specific needs faced by start-up companies and address these in an appropriate fashion. Start-ups need the financing that the BSE can help raise. At the same time, they are not always prepared to meet reporting requirements that currently exist on our exchange and do not have the kind of resources necessary to inform investors on a regular basis about company developments. We can help by designing a special market (to run in parallel with the official market and the junior market) for these companies with lighter reporting requirements and listing rules.
How will the eventual privatization of the BSE change the public's view on the institution?
A private stock exchange will give its management flexibility in doing business. The public will be more confident to trade here. Local as well as foreign investors will see that things are moving forward in Lebanon. Hopefully, investors will also come back en masse to the country once the political situation is stabilized.
What have been the major transformations brought about by the CMA?
Currently, the CMA is in the process of updating and releasing new regulations. Up until now, the CMA released 20 regulations that govern financial markets, disclosure policy, crowdfunding, insider trading, derivatives, securitization, and collective investment schemes as well as regulations concerning financial institutions, brokerage firms, and the suitability of those selling financial products.
What are your expectations for the BSE in the following year?
The future of the BSE depends fully on the completion of the privatization process, since this will signal the true engagement of the financial sector. Once this process is implemented, I hope that Beirut recovers part of its former position as a leading financial capital market in the Middle East.

TABLE OF CONTENTS
Focus: Lebanese-French Relations
Let’s be Franc
Lebanon shares a close relationship with its former colonizer, both in terms of economic relations and cultural identity among Lebanese. In spite of hardships like the presidential power vacuum and Syrian war next door, the bond is only getting stronger.
read articleFocus: Tripoli Economic Free Zone
The Tripoli Transformation
The Tripoli Special Economic Zone (TSEZ) is one of most ambitious projects in Lebanon at the moment. With an initial cost of USD27 million, it is meant to provide an alternative to the heavily centralized economic activity in Beirut, a new gateway for investments and trade to settle in northern Lebanon, and will transform the image of a long-neglected region.
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Dr. Freddie Baz, Vice Chairman & Group Strategy Director, Bank Audi
TBY talks to Dr. Freddie Baz, Vice Chairman & Group Strategy Director of Bank Audi, on the bank's increase in profits, dealing with currency devaluation, and working to turn the economy into an export-driven one.
read articleReview: Insurance
Life is a Rollercoaster
Unlike many emerging markets, Lebanon enjoys a relatively high insurance penetration rate and strong life segment, buoyed by compulsory lines and bancassurance. Competition remains fierce, however, and reform aimed at encouraging consolidation looks far off.
read articleInterview
Max R. Zaccar, Chairman of Commercial Insurance & President of the Association, Insurance Companies
TBY talks to Max R. Zaccar, Chairman of Commercial Insurance & President of the Association of Insurance Companies, on the resilience of the sector, increasing the already-high penetration rates in the country, and remaining one of the strongest insurance companies in the region.
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HE Arthur Nazarian, Minister, Energy and Water Resources
TBY talks to HE Arthur Nazarian, Minister of Energy and Water Resources, on the potential offshoots from oil and gas explorations, the country's National Energy Efficiency Action Plan, and attempts to increase renewable energy consumption.
read articleInterview
Wissam Zahabi, Chairman, Board of the Lebanese Petroleum Administration (LPA),
TBY talks to Wissam Zahabi, Chairman of the Board of the Lebanese Petroleum Administration (LPA), on making the investment climate attractive for foreign companies and becoming self-sufficient in energy.
read articleFocus: Sovereign Wealth Funds
Gas Pipe Dreams
Despite excitement over exploration of Lebanon's hydrocarbons, the creation of a sovereign wealth fund, which was included in legislation, has yet to take place. The country faces several obstacles in its path to creating and properly managing a fund.
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Pierre El Khoury, General Director, Lebanese Center for Energy Conservation (LCEC)
TBY talks to Pierre El Khoury, General Director of the Lebanese Center for Energy Conservation (LCEC), on the development of energy efficiency in Lebanon, awareness of energy conservation, and the country's 2020 renewable energy goals.
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Dr. Fady Gemayel, President, Association of Lebanese Industrialists (ALI)
TBY talks to Dr. Fady Gemayel, President of the Association of Lebanese Industrialists (ALI), on the group's work to promote industrialists, new developments in terms of industrial cities, and the future of industry in the country.
read articleFocus: Industrial Cities
Industrial Solution
Domestic and regional events have stifled Lebanon in building a strong national industry to protect and sustain its economy. Four proposed industrial zones throughout the country may provide it with the economic backbone it so desperately needs.
read articleInterview
Marianne Hoayek, Director of the Executive Office, Banque du Liban
TBY talks to Marianne Hoayek, Director of the Executive Office of Banque du Liban, on the roots of the Circular 331 concept, bridging funding gaps throughout the startup lifecycle, and the country's growing knowledge economy.
read articleRoundtable
Thinking It Through
On June 12, TBY and the American-Lebanese Chamber of Commerce (AmCham) organized a roundtable titled “Startup ecosystem sustainability: fostering cooperation to drive entrepreneurship." The participants discussed the impact of Circular 331, an initiative by Bank du Liban, the Lebanese central bank, to inject a potential of USD400 million into the local enterprise market and guarantee 75% of banks' investments in startups and startup support.
read articleFocus: Infrastructure for the startup ecosystem
The New Star
Startups are ubiquitous in Lebanon despite the difficulty of starting a business and the lack of services available to new businesses. However, a number of actors, both public and private, are innovating the environment and allowing startups to fulfill a greater role in the country's economy.
read articleFocus: Maritime Exports Bridge
Bridging The Gap
The conflict in Syria has wrought serious damage on the Lebanese economy, effectively closing off the country's trade routes through Syria. However, a new program geared at balancing the price disparities between land and sea transit is poised to help Lebanese industries.
read articleFocus: Real Estate
A Stimulus For The Rest Of Us
The real estate market in Lebanon is nothing like it used to be. The sector has slowed considerably, and demand has shifted from the traditional center, Beirut. However, stimulus packages from the central bank over the years have proven beneficial for all parties involved.
read articleInterview
Armand Pahrés, President, Lebanese Pharmaceutical Importers Association (LPIA)
TBY talks to Armand Pahrés, President of the Lebanese Pharmaceutical Importers Association (LPIA), on the development of legislation in the sector, boosting further innovation, and opportunities for Lebanon to become more self-sufficient in pharmaceuticals.
read articleFocus: Incentives for pharmaceuticals in Lebanon
Pharma Land
Lebanon has always been the region's leader in all things health related. Its pharmaceutical industry is no exception, and the country's incentives for international pharma companies to operate, manufacture, and distribute in Lebanon are only getting stronger.
read articleInterview
HE Elias Bou Saab, Minister, Education and Higher Education
TBY talks to HE Elias Bou Saab, Minister of Education and Higher Education, on the ministry's initiatives to improve the education system, ensuring access to education for Syrian refugee children, and reversing the brain drain in the country.
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Mohamed Harajli, Provost, American University of Beirut (AUB)
TBY talks to Mohamed Harajli, Provost of the American University of Beirut (AUB), on his upcoming plans for the university, the key role played by the AUB alumni, and fostering an entrepreneurial spirit among students.
read articleFocus: Programs to school Syrian refugee children
High Marks
Proportional to its population, Lebanon has taken in significantly more Syrian refugees than any other country. With the country now facing the problem of placing the tens of thousands of Syrian children in school, international donors and local and foreign organizations are making educational support a priority.
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Joseph G. Jabbra, President, Lebanese American University (LAU)
TBY talks to Joseph G. Jabbra, President of the Lebanese American University (LAU), on embracing technology at the university, the challenges of Lebanon's brain drain, and the importance of having international links with other institutions.
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