Lebanon struggles to restore normality amid protests

Banque du Liban, the country’s central bank, provided banks with money from their deposits in order to meet citizens’ needs. (Reuters)
Updated 22 October 2019

Lebanon struggles to restore normality amid protests

  • The ISG urged Lebanese authorities to address people’s complaints, demanding structural reforms and responsible and acceptable social changes that truly curb corruption and waste
  • Such changes, the ISG said, should ensure proper governance and full accountability, and lead to sustainable and stable growth

BEIRUT: Lebanese banks will remain closed in light of nationwide protests for the fifth consecutive day, the Association of Banks in Lebanon announced.

However, Banque du Liban, the country’s central bank, on Tuesday provided banks with money from their deposits in order to meet citizens’ needs.

Meanwhile, Education Minister Akram Chehayeb ordered all schools and universities to resume classes on Wednesday “in order to preserve the interests of students and to preserve the academic year.”

Prime Minister Saad Hariri met with the International Support Group (ISG) for Lebanon, which includes envoys from the US, Russia, France, Britain, Germany, Italy, the EU, China and the Arab League, as well as the UN special coordinator for Lebanon, Jan Kubis. 

The ISG urged Lebanese authorities to address people’s complaints, demanding “structural reforms and responsible and acceptable social changes that truly curb corruption and waste, away from sectarianism.”

Such changes, it said, should “ensure proper governance and full accountability, and lead to sustainable and stable growth.”

Kubis said Hariri “committed that the government and its legitimate security forces will continue to protect civilians who are demonstrating peacefully, and will take appropriate measures against any possible violent incitement, to protect public and private property and institutions, and the people’s right to peacefully express their views.”

On behalf of the ISG, Kubis urged “officials and political actors in Lebanon to listen to the legitimate demands of the people, work with them on solutions, apply them, and refrain from any statements and acts that could inflame tensions and incite confrontation and violence.”

After meeting Hariri, Kuwait’s ambassador to Lebanon, Abdel Aal Al-Kinai, said: “Now is not the time to speak but to act.”

The CEDRE Conference follow-up committee will convene in Paris on Nov. 15 to launch the implementation of development projects worth $11 billion to help Lebanon overcome its economic and financial crisis.


Oman’s bond market return a key test for reform path

Updated 21 October 2020

Oman’s bond market return a key test for reform path

  • After becoming ruler in January, Sultan Haitham made shaking up and modernising state finances a top priority

DUBAI: Oman’s return to the international bond market this week will be a test of its ability to convince investors that long-awaited fiscal reforms have started to put it on a sustainable financial footing.

Oman, rated below investment grade by all the major credit agencies, announced on Monday plans to issue bonds with maturities of three, seven and 12 years, in what would be its first global debt sale this year.

Sultan Haitham, who became Oman’s ruler in January, has made shaking up state finances one of his priorities.

But investors would like to see more concrete steps being taken and, after a further sovereign downgrade last week, may require the new bonds to offer a significant premium over the country’s existing debt.

“The new sultan has done some good things — rationalizing the number of ministries, the implementation of VAT, plans to generate additional tax revenues, and they still have sovereign assets,” said Raza Agha, head of emerging markets credit strategy at Legal & General Investment Management.

“There is positive momentum but it will take time for that credibility to build.”

According to a bond prospectus, Oman has begun talks with some Gulf countries for financial support.

“I don’t think this will actually be taken into consideration by investors unless there is a tangible announcement from Gulf countries with a tangible support package,” said Zeina Rizk, executive fixed income director at Arqaam Capital.

Oman will likely price the new three-year bonds in the high 4 percent area, the seven-year tranche in the high 6 percent and the 12-year in the mid-to-high 7 percent area, implying a premium of at least 50 basis points (bps) over its existing curve, she said.

Two other investors, who did not wish to be named, said the paper could carry a 25 bps premium over existing secondary trading levels.

Sources have previously told Reuters Oman would target over $3 billion with the new deal.

“If they take $3 to 3.5 billion, you will have a market indigestion for Oman, and I’m sure people will ask to be compensated for this risk,” Rizk said.