Beirut: Lebanese stocks slid, and pressure on the pound increased yesterday after Israel responded to a Hezbollah attack with an air and sea blockade.
"There is panic. Stocks are down sharply across the board, and Solidere reached its limit down," said one Beirut-based equities trader, referring to Lebanon's largest company. "It will recover eventually but when this is all over."
The Lebanese pound was trading at 1,509 to 1,514 to the dollar, the weaker end of the official band of 1,501-1,514, with the central bank intervening, traders said.
They said there was no major spike in demand for the dollar yet but predicted that pressure would rise if the fighting is prolonged.
Solidere's A share closed down 14 per cent at $18.31. The real estate developer's B share fell its maximum 15 per cent per session to $18.31.
Shares in Lebanon's big banks also were down sharply, almost to their 10 percent limits.
Lebanon's largest bank, BLOM, was down 9.59 per cent earlier in the session but recovered to close 3.42 per cent down at $70.50. Bank Audi fell 5.16 per cent to end at $63.35. Byblos Bank fell 9.76 per cent to $1.94.
Senior bankers played down the effects, saying Lebanon had come through this kind of political pressure before without suffering a serious financial crisis.
