CREDIT LIBANAIS S.A.L.

CREDIT LIBANAIS S.A.L. Issue No. 443 December 29 th January 9 th 2015 Economic Research Unit Credit Libanais Headquarters Adlieh Beirut, Lebanon Tel +961.1.398169 Fax +961.1.398169 Ext. 1085 research@cl.com.lb

TABLE OF CONTENTS LEBANON NEWS ECONOMIC INSIGHTS > Beirut Second Most Expensive Capital in the Arab Region in 1 > Lebanon s External Debt Posted Returns of 8.80% in 2 > BSE Announces Delisting of Maturing Eurobonds 2 > Tax-Free Shopping up by 8% in Q4-3 > Banks Assets at $172.21 Billion in November 4 > Public Debt at $66.63 Billion in November 5 > Annual Inflation at 0.48% in November 6 > Coincident Indicator up by 0.78% in October 6 > Investment Banks Assets at $4.04 Billion in November 7 > Balance of Trade Deficit at $15.81 Billion in November 8 > Customs Collections Down by 4.63% up to November 9 > Total Reserves at $48.81 Billion in 10 > BSE Activity Soars by 61% in the Full Year 11 > Number of BIA Passengers up by 4.84% in 12 CORPORATE NEWS > Kafalat Loans Attain $109.55 Million in 13 MONETARY PERFORMANCE > Monetary Aggregates 14 > Money Markets 14 FIXED INCOME > Fixed Income 15 BEIRUT SECOND MOST EXPENSIVE CAPITAL IN THE ARAB REGION IN Beirut ranked 2 nd regionally and 233 rd worldwide in Numbeo s Consumer Price Index (CPI) when benchmarked to that of New York city, with a CPI score of 69.89 by end of year. TAX-FREE SHOPPING UP BY 8% IN Q4- Global Blue published its quarterly Insights into Tourist Spending report conveying some 8% annual expansion in tax-free shopping in Lebanon during the fourth quarter of. BANKS ASSETS AT $172.21 BILLION IN NOVEMBER The consolidated balance sheet of commercial banks operating in Lebanon posted an annual increase of 6.35% to LBP 259,606 billion ($172.21 billion) during the month of November, from LBP 244,094 billion ($161.92 billion) in November 2013. LEBANESE EQUITIES > Lebanese Equities & Credit Libanais Indices 16 Lebanon's Economic & Financial Sector Indicators 18 Lebanon's Ratings 19 PUBLIC DEBT AT $66.63 BILLION IN NOVEMBER On the public finance front, Lebanon s gross public debt added $4.20 billion on an annual basis to $66.63 billion as at the end of November, from $62.44 billion as at end of November 2013. INVESTMENT BANKS S ASSETS AT $4.04 BILLION IN NOVEMBER According to Banque Du Liban (BDL) statistics, the consolidated balance sheet of investment banks operating in Lebanon expanded by 1.25% during the first eleven months of the year to nearly $4.04 billion, up from nearly $3.99 billion as at year-end 2013. ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-398169 FAX: 01-398169 EXT. 1085

SYNOPSIS OF TERMS "BDL" "ABL" "MOF" "BOP" "IMF" "Moody's" "BSE" "GDRs" "M1" "M2" "M3" "M4" "CPI" "PPI" "CLASI" "CLFI" "CLCI" EIU EOY "P/E" "P/BV" "YTD" "YTD Price Performance" "Forex" "LBP" "USD" "Yen" "GBP" "CHF" "Y-O-Y" "GDP" "MENA" LE SAR AED BD Banque Du Liban Association of Banks in Lebanon The Lebanese Ministry of Finance Balance of Payment The International Monetary Fund Moody's Investors Service Beirut Stock Exchange Global Depositary Receipts Currency in Circulation + Demand Deposits in LBP M1 + Other Deposits in LBP M2 + Deposits in Foreign Currencies M3+ Treasury Bills Held By Non Banking System, Including Accrued Interests Consumer Price Index Producer Price Index Credit Libanais Aggregate Stock Index Credit Libanais Financial Sector Stock Index Credit Libanais Construction Sector Stock Index Economist Intelligence Unit Price to Earnings Multiple Price to Book Multiple Year To Date Yield to Date Price Appreciation Foreign Exchange The Lebanese Pound The United States Dollar The Japanese Yen The British Pound/ Sterling Pound The Swiss Franc Year-On-Year Gross Domestic Product Middle East and North Africa Livre Egyptienne Egyptian Pound Saudi Arabian Riyal United Arab Emirates Dirham Bahraini Dinar ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-398169 FAX: 01-398169 EXT. 1085

BEIRUT SECOND MOST EXPENSIVE CAPITAL IN THE ARAB REGION IN Numbeo.com, a global statistics website, released on January 1, 2015 its global cost of living index for the year, in which it compared cities worldwide based on their Consumer Price Index (CPI) when benchmarked to that of New York city, while also uncovering the values of three other indices namely the Rent Index, the Restaurant Price Index, and the Local Purchasing Power Index for each city, always when benchmarked to the city of New York. Hamilton, Bermuda emerged as the most expensive city in the world, with a CPI of 163.55 as at end of December, implying that prices in Hamilton were 63.55% more expensive than prices in New York by the end of December, trailed by Geneva, Switzerland (CPI of 145.18) and Caracas, Venezuela (CPI of 141.41). Regionally, Doha, Qatar ranked as the most expensive Arab capital with a CPI of 74.00 (ranking 208 th globally), trailed by Beirut (ranking 2 nd regionally and 233 rd worldwide) with a CPI score of 69.89 by end of year, meaning that prices in Beirut are 30.11% cheaper than prices in New York. In addition, Beirut scored a Rent Index of 33.89, a Restaurant Price Index of 73.54 (the second highest among Arab capitals after Doha, Qatar 78.18 ), and a Local Purchasing Power Index of 46.77. Cost of Living Index 2015 Consumer Regional Global Price Index Rank (Arab Rent Index Restaurant Local Purchasing Rank Price Index (CPI) Capitals) Power Index City Hamilton, Bermuda 163.55 1-120.02 132.91 69.79 Geneva, Switzerland 145.18 2-81.46 141.23 130.21 Caracas, Venezuela 141.41 3-60.46 122.27 9.73 New York, USA 100.00 31-100.00 100.00 100.00 Doha, Qatar 74.00 208 1 75.51 78.18 114.56 Beirut, Lebanon 69.89 233 2 33.89 73.54 46.77 Amman, Jordan 62.63 265 3 16.48 59.46 39.15 Abu Dhabi, UAE 62.28 268 4 75.13 62.95 105.35 Muscat, Oman 57.93 288 5 32.91 49.85 106.09 Manama, Bahrain 57.60 291 6 33.71 61.70 67.53 Tripoli, Libya 56.64 294 7 25.93 52.38 44.58 Khartoum, Sudan 52.33 322 8 15.08 35.84 51.35 Riyadh, KSA 52.22 323 9 19.03 35.46 132.80 Baghdad, Iraq 51.66 328 10 17.44 43.82 41.11 Casablanca, Morocco 42.49 386 11 18.56 31.40 40.71 Damascus, Syria 40.36 403 12 12.20 37.00 20.40 Cairo, Egypt 38.18 414 13 10.04 33.11 27.48 Source: Numbeo, Credit Libanais Economic Research Unit From a historical perspective, Beirut has become relatively cheaper over the last couple of years, with its CPI dwindling from 88.92 by year-end 2011 to 73.62 by year-end 2013 and 69.89 by year-end. Moreover, Beirut s Local Purchasing Power Index has improved markedly on a relative basis when compared to year-end 2011 (from 25.73 to 46.77), while its Restaurant Price Index has remained relatively stable over the 2012- period. This further depicted by the below table: Beirut (Indices Relative to 2011 2012 2013 New York City) Consumer Price Index 88.92 79.27 73.62 69.89 Rent Index 37.05 41.72 36.08 33.89 Restaurant Price Index 76.19 77.42 75.15 73.54 Local Purchasing Power Index 25.73 42.19 40.45 46.77 Source: Numbeo, Credit Libanais Economic Research Unit SOURCE: NUMBEO, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 1

LEBANON S EXTERNAL DEBT POSTED RETURNS OF 8.80% IN According to the High Yield & Emerging Market Profiles report published by Merrill Lynch this week, the yield on Lebanon s external debt stood at 8.80% as at end of, from 8.94% a month earlier. This poises Lebanon to occupy the sixth place among 10 MENA countries included in the index in terms of total yield, with Egypt topping the list with a year to date (YTD) return of 21.01%, followed by Turkey (18.22%), Tunisia (15.65%), and Morocco (15.16%), only to name a few. When factoring in all emerging market countries, Belize emerged as the best performer with a yield of 21.54% as at end of year, and Venezuela suffering the worst performance (-30.81%). As for the month of December alone, Lebanon achieved a negative return of -0.13%, compared to 0.71% in November. In parallel, Lebanon s YTD excess return stood at 4.51% by end of, ranking as such 5 th among surveyed MENA countries, with Egypt also occupying the first place with an excess return of 13.38, followed by Turkey (9.99%), Tunisia (9.06%), and Morocco (5.91%). In addition, the report indicated that option adjusted spreads on Lebanon s Eurobonds expanded to 381 basis points (bps) as at end of December, up from 375 bps at end of November. Finally, the weight assigned to Lebanon in Merrill Lynch s Emerging Markets Eurobond Index rose to 3.37% in December, up from 3.24% in November, as illustrated in the section below: Lebanon's Sovereign External Debt November December Up to November Up to December Returns (%) 0.71-0.13 8.94 8.80 Excess Return (%) -0.02 0.01 4.51 4.51 November 30, December 31, Option Adjusted Spreads (bps) 375.0 381.0 - - Lebanon's Weight in the Index (%) 3.24 3.37 - - Source: M errill Lynch, Credit Libanais Economic Research Unit YTD Return on Sovereign External Debt Among MENA Countries in Country Returns (%) MENA RankExcess Return (%) MENA Rank Egypt 21.01 1 13.38 1 Turkey 18.22 2 9.99 2 Tunisia 15.65 3 9.06 3 Morocco 15.16 4 5.91 4 Bahrain 9.42 5 2.83 7 Lebanon 8.80 6 4.51 5 UAE 8.12 7 2.48 8 Qatar 7.62 8 0.54 9 Iraq 4.97 9-3.07 10 Jordan 4.62 10 4.18 6 Source: M errill Lynch, Credit Libanais Economic Research Unit BSE ANNOUNCES DELISTING OF MATURING EUROBONDS According to the Beirut Stock Exchange (BSE) circular number 404/2015 and dated January 9, 2015, the BSE announced the delisting of the Republic of Lebanon (ROL) Eurobond issue number 53 having a face value of $250 million, and this becoming effective as at the end of the trading session of Monday January 12, 2015. The bonds, which are denominated in USD, carry a coupon rate of 5.875% and mature in January 2015. SOURCE: MERRILL LYNCH, BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 2

TAX-FREE SHOPPING UP BY 8% IN Q4- Global Blue, one of the world s leaders in Tax Refund services, published its quarterly Insights into Tourist Spending report conveying some 8% annual expansion in tax-free shopping in Lebanon during the fourth quarter of. The report showed that spending by French tourists rose by 50% y-o-y in Q4-, accompanied by a 36% increase in spending by Saudi Arabian nationals, a 33% improvement in spending by tourists from the United States, and a 21% rise in spending by Jordanian tourists, only to name a few. On the other hand, spending by UAE and Syrian tourists shed by 9% and 24% on a respective basis, as sketched in the chart below: Annual Growth in Spending in the Fourth Quarter of 60% 50% 40% 36% 33% 20% 8% 5% 21% 14% 13% 11% 2% 0% -20% -40% -9% -24% -60% All Countries Saudi Arabia UAE Kuwait Jordan Egypt France Qatar Syria United States Nigeria Other Countries Source: Global Blue, Credit Libanais Economic Research Unit The lion s share of spending goes to Saudi Arabian visitors (15%), followed by UAE (13%), Egyptian (8%), and Kuwaiti (7%) tourists. Total Spending Distribution by Country of Residence in the Fourth Quarter of Other, 50% Saudi Arabia, 15% UAE, 13% Kuwait, 7% Jordan, 7% Egypt, 8% As for the breakdown of spending, Fashion & Clothing articles accounted for 67% of total Q4 tourists spending, trailed, and by far, by Watches & Jewelry items (20%) and Home & Garden (3%) appliances. As far as the geographical distribution of spending is concerned, Beirut, which hosts most pertinent shopping malls and brands, amassed 81% of total spending, followed by the Metn (12%), Baabda (4%), and Kesserwan (2%) regions. Total Spending Distribution by Category in the Fourth Quarter of Fashion & Clothing 67% Watches & Jewelry 20% Home & Garden 3% Department Stores 3% Souvenirs & Gifts 2% Consumer Electronics & Household Appliances 1% Others 4% Total 100% Source: Global Blue, Credit Libanais Economic Research Unit Source: Global Blue, Credit Libanais Economic Research Unit Metn, 12% Spending Distribution by Area in the Fourth Quarter of Kesserwan, 2% Baabda, 4% Others, 1% Beirut, 81% Source: Global Blue, Credit Libanais Economic Research Unit SOURCE: GLOBAL BLUE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 3

BANKS ASSETS AT $172.21 BILLION IN NOVEMBER The consolidated balance sheet of commercial banks operating in Lebanon rose by LBP 1,421 billion ($942.62 million) during the month of November to LBP 259,606 billion ($172.21 billion), up from 258,185 billion ($171.27 billion) in October. Said increase can be mainly attributed to the 1.30% monthly rise in claims on the resident private sector to LBP 67,941 billion ($45.07 billion), in part financed by the 0.41% rise in resident private sector deposits to LBP 170,444 billion ($113.06 billion). Furthermore, the consolidated assets of the banking sector posted an annual increase of 6.35%, from a reading of LBP 244,094 billion ($161.92 billion) in November 2013. The sector remains highly liquid, enjoying a primary liquidity ratio of 77.29% as at the end of November, compared to a liquidity level of 78.51% a year earlier. USD Billion 2008 2009 2010 2011 2012 Nov-2013 2013 Nov- Total Assets 94.26 115.25 128.93 140.58 151.88 161.92 164.82 172.21 Loans to the Private Sector 25.04 28.37 34.93 39.38 43.45 46.81 47.38 50.51 Customer Deposits 78.66 96.82 108.60 117.70 127.66 136.05 139.17 145.86 Capital Accounts 7.10 7.94 9.22 10.72 12.64 14.09 14.20 15.48 Dollarization Rate 69.57% 64.46% 63.24% 65.92% 64.82% 65.66% 66.10% 65.68% Private Sector Loans/Deposits Ratio 31.83% 29.31% 32.16% 33.45% 34.04% 34.41% 34.05% 34.63% - LBP Private Sector Loans/LBP Deposits 13.69% 12.93% 16.88% 20.53% 20.84% 22.66% 22.65% 23.63% - FC Private Sector Loans/FC Deposits 40.06% 38.62% 41.36% 40.47% 41.63% 40.94% 40.26% 40.74% Source: The Association of Banks in Lebanon, Credit Libanais Economic Research Unit The compounded annual growth rate (CAGR) in the consolidated assets of the banking sector reached 11.06% over the November 2008 November period, as captured by the chart hereunder: Evolution of Commercial Banks' Consolidated Assets On the funding side, customer deposits rose by LBP 943 billion ($625.54 million) month-on-month to LBP 219,889 billion ($145.86 billion) as at end of November, up from LBP 218,946 billion ($145.24 billion) in October. Moreover, deposits at Lebanese bank grew by 7.21% year-on-year, from LBP 205,090 billion ($136.05 billion) in November 2013, mimicking the trend in total assets. It is worth noting that the still prevailing presidential void coupled with the political and security tensions continued to weigh negatively on investors sentiment, resulting in an increase in the deposits dollarization rate to 65.68% in November, up from 65.66% in November 2013. On the lending front, loans to the private sector increased to LBP 76,145 billion ($50.51 billion) in November, up from LBP 75,125 billion ($49.83 billion) in October. The loans portfolio also rose by 7.91% annually, with the ratio of customer loans to customer deposits firming at 34.63% as at end of November, from 34.31% in October and 34.41% in November of the previous year. USD Billion 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 Activity in the Lebanese Banking Sector 91.76 Nov- 2008 164.82 172.21 151.88 140.58 128.93 115.25 2009 2010 2011 2012 2013 Nov- Source: ABL, Credit Libanais Economic Research Unit 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 2008 2009 2010 2011 2012 Nov-2013 2013 Nov- 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Loans (USD Billion) Dollarization Rate (Deposits) Deposits (USD Billion) Loans/Deposits Ratio Source: ABL, Credit Libanais Economic Research Unit SOURCE: ABL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 4

PUBLIC DEBT AT $66.63 BILLION IN NOVEMBER On the public finance front, Lebanon s gross public debt widened by $394.03 million during the month of November to $66.63 billion, up from $66.23 billion in October. On an annual basis, gross public debt added $4.20 billion, from $62.44 billion as at end of November 2013. It is worth highlighting, in this context, that 55.97% of the country s gross public debt is financed by the Lebanese banking sector. As far as domestic debt is concerned, the latter rose by 1.51% month-on-month and by 13.25% year-on-year to $40.87 billion. External debt, on the other hand, fell by 0.82% on a monthly basis and by 2.25% on a yearly basis to settle at $25.76 billion. The share of domestic debt continued to pile up, reaching 61.34% of gross public debt as at end of November, with that of external debt narrowing to 38.66%. Net public debt, which factors out public sector deposits, came in 8.00% higher y-o-y at $56.70 billion as at end of November, from $52.50 billion as at end of November 2013. Public Debt (USD Billion) November November Y-O-Y % 2013 Change Gross Public Debt 62.44 66.63 6.71% Domestic Debt 36.09 40.87 13.25% External Debt 26.35 25.76-2.25% Public Sector Deposits 9.94 9.92-0.16% Net Public Debt 52.50 56.70 8.00% Source: The Association of Banks in Lebanon, Credit Libanais Economic Research Unit Composition of Gross Public Debt as at End of November External Debt 38.66% Source: ABL, Credit Libanais Economic Research Unit Domestic Debt 61.34% The chart below sketches the annual evolution of Lebanon s public debt since November 2007, pointing to some 5.61% compounded annual growth rate in net public debt over the concerned period. Evolution of Net Public Debt Billions of USD 60.00 50.00 40.00 38.70 40.74 43.73 44.91 45.83 48.38 52.50 56.70 30.00 20.00 10.00 0.00 Nov-2007 Nov-2008 Nov-2009 Nov-2010 Nov-2011 Nov-2012 Nov-2013 Nov- Source: ABL, Credit Libanais Economic Research Unit SOURCE: ABL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 5

ANNUAL INFLATION AT 0.48% IN NOVEMBER According to the Association of Banks in Lebanon (ABL), inflation, as captured by the annual change in ABL s consumer price index (CPI), stood at 0.48% in November, in comparison with a negative 0.27% in October and a positive 1.24% in September. More specifically, November s CPI rose to 151.16, up from 150.44 during that same month a year before. On a monthly basis, Lebanon s CPI added 0.68% in November, compared to some 1.28% contraction in October. CPI Monthly % Change Yearly % Change Nov-2013 150.44-0.07% 0.16% Dec-2013 148.91-1.02% 2.05% Jan- 153.29 2.94% 2.52% Feb- 149.86-2.24% 0.86% Mar- 149.43-0.29% -0.23% Apr- 149.71 0.19% -0.03% May- 150.41 0.47% 0.63% Jun- 150.79 0.25% 1.19% Jul- 150.11-0.45% 1.54% Aug- 149.99-0.08% 0.81% Sep- 152.09 1.40% 1.24% Oct- 150.14-1.28% -0.27% Nov- 151.16 0.68% 0.48% Source: ABL, Credit Libanais Economic Research Unit 154.00 153.00 152.00 151.00 150.00 149.00 148.00 147.00 146.00 Evolution of Lebanon's Consumer Price Index Nov-2013 Dec-2013 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Consumer Price Index CPI (%) Source: ABL, Credit Libanais Economic Research Unit Oct- Nov- 4.00% 3.00% 2.00% 1.00% 0.00% -1.00% -2.00% -3.00% COINCIDENT INDICATOR UP BY 0.78% IN OCTOBER Banque Du Liban s coincident indicator, which is an indicative measure of the country s overall economic activity, rose by 3.14% during the month of October to 272.6, up from 264.3 in September. Concurrently, the coincident indicator came in 0.78% higher on a twelve-month basis from a reading of 270.5 in October 2013, thus portraying a shy improvement in the overall macroeconomic environment. Evolution of Lebanon's Coincident Indicator 290 285.1 283.8 280 278.8 280.3 270 270.5 267.9 272.5 271.8 273.4 265.0 264.3 272.6 260 250 248.4 240 230 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Source: ABL, Credit Libanais Economic Research Unit SOURCE: ABL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 6

INVESTMENT BANKS S ASSETS AT $4.04 BILLION IN NOVEMBER According to Banque Du Liban (BDL) statistics, the consolidated balance sheet of investment banks operating in Lebanon expanded by 1.25% during the first eleven months of the year to nearly $4.04 billion, up from nearly $3.99 billion as at year-end 2013. This expansion owes, in the first place, to the 13.66% hike in claims on the private sector to $1,367 million, coupled with the 8.94% rise in claims on the public sector to $537 million. Abiding by legislative decree number 50 and subsequent BDL circulars, investment banks operating in Lebanon have managed over the last couple of years to dampen their exposure to the public sector at the expense of increasing loans to the private sector. Consequently, the surplus representing the difference between loans to the private sector and claims on the public sector ended the eleventh month of up at $830 million, in comparison with a surplus of $710 million in the full year 2013, $419 million in 2012, and $353 million in 2011. Evolution of Investment Banks Consolidated Balance Sheet in Millions of USD 2011 2012 2013 Nov- % change C ash and Banks 1,916 1,736 1,922 1,841-4.20% C laims on Private Sector 1,147 1,181 1,203 1,367 13.66% C laims on Public Sector 794 762 493 537 8.94% Other Items 320 338 368 290-21.10% Total Assets 4,178 4,017 3,986 4,036 1.25% Private Sector Deposits: 2,335 2,178 1,946 1,977 1.60% o/w Resident Deposits in LBP 924 849 688 678-1.51% o/w Resident Deposits in Foreign Currencies 1,005 1,022 971 956-1.63% o/w Non Resident Deposits in LBP 109 74 66 67 1.54% o/w Non Resident Deposits in Foreign Currencies 296 233 220 277 25.57% Liabilities to the Public Sector 283 162 193 178-7.49% Liabilities to the Financial Sector 558 570 598 587-1.83% C apital Accounts 811 927 1,000 1,137 13.68% Other Items 190 181 250 157-37.08% Total Liabilities 4,178 4,017 3,986 4,036 1.25% Source: BDL, Credit Libanais Economic Research Unit Investment Banks' Loans to the Private Sector V/S Claims on The Public Sector ($ Million) Starting the year 2010, Investment Banks' Loans to the Private Sector > Claims on the Public Sector in Conformity with BDL's Directives 1,400 1,200 1,147 1,181 1,203 1,367 1,000 794 762 800 600 493 537 400 200 0 2011 2012 2013 Nov- Claims on the Public Sector It is worth noting that the number of investment banks operating in Lebanon stood at 16 as at end of Q1-, allocated over 21 branches, as captured by the chart below: Evolution of the Number of Investment Banks and Branches in Lebanon Claims on the Private Sector 25 20 15 17 17 17 12 12 12 13 18 15 20 22 22 17 17 16 21 10 5 0 2007 2008 2009 2010 2011 2012 2013 Q1- Number of Investment Banks Number of Branches SOURCE: BDL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 7

BALANCE OF TRADE DEFICIT AT $15.81 BILLION IN NOVEMBER On the current account side of the balance of payment, Lebanon s balance of trade deficit widened by $67 million year-on-year to around $15.81 billion as at the end of the first eleven months of the year, and this according to statistics published by Lebanon s Higher Customs Council. Said increase in the deficit was buoyed by some $654 million contraction in exports to $3.04 billion, which outweighed the $587 million y-o-y drop in imports to around $18.85 billion. Balance of Trade For the Period Ending Y-O-Y (US$ Million) November-2013 November- % Change Exports 3,694 3,040-17.70% Imports 19,432 18,845-3.02% Trade Balance (15,738) (15,805) 0.43% Source: Higher C ustoms C ouncil, Credit Libanais Economic Research Unit USD Million 24,000 20,000 16,000 12,000 8,000 4,000 0-4,000-8,000-12,000-16,000-20,000 Cumulative Balance of Trade Deficit November-2013 November- Exports Imports Deficit Source: Higher Customs Council, Credit Libanais Economic Research Unit China topped the list of countries exporting to Lebanon, with its exports bill exceeding $2.27 billion (12.06% of Lebanon s imports) as at end of November. Saudi Arabia, on the other hand, led the list of countries importing from Lebanon, with its imports invoice aggregating to $345 million (11.35% of Lebanon s exports). This is further elaborated in the tables below: Major Import Sources (in USD Million) China 2,273 12.06% Italy 1,535 8.15% France 1,198 6.36% Germany 1,154 6.12% USA 1,125 5.97% Source: Higher Customs Council, Credit Libanais Economic Research Unit Major Export Destinations (in USD Million) Saudi Arabia 345 11.35% South Africa 291 9.57% UAE 291 9.57% Iraq 235 7.73% Syria 221 7.27% Source: Higher Customs Council, Credit Libanais Economic Research Unit Exports of pearls, precious or semi-precious stones accounted alone for 16.81% ($511 million) of total Lebanese exports up to November, followed by prepared foodstuffs ($466 million <15.33%>), machinery & mechanical appliances ($406 million <13.36%>), and chemical products ($347 million <11.41%>). On the other hand, mineral products constituted the lion s share of imported goods ($4,566 million <24.23%>), trailed, and by far, by machinery & mechanical appliances ($1,993 million <10.58%>), chemical products ($1,840 million <9.76%>), and transport equipment ($1,274 million <6.76%>). Breakdown of Exports by Product During the First Eleven Months of the Year Product Value ($ Million) % of Total Pearls, Precious or Semi-Precious Stones 511 16.81% Prepared Foodstuffs 466 15.33% Machinery & Mechanical Appliances 406 13.36% Chemical Products 347 11.41% Others 1,310 43.09% Total Exports 3,040 100% Source: Higher Customs Council, Credit Libanais Economic Research Unit Breakdown of Imports by Product During the First Eleven Months of the Year Product Value ($ Million) % of Total Mineral Products 4,566 24.23% Machinery & Mechanical Appliances 1,993 10.58% Chemical Products 1,840 9.76% Transport Equipment 1,274 6.76% Others 9,172 48.67% Total Imports 18,845 100% Source: Higher Customs Council, Credit Libanais Economic Research Unit SOURCE: HIGHER CUSTOMS COUNCIL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 8

CUSTOMS COLLECTIONS DOWN BY 4.63% UP TO NOVEMBER Figures released by the Lebanese Customs unveil a 4.63% annual contraction in customs collections to around $2,541 million by the end of the eleventh month of the year, down from $2,664 million over the same period in 2013. These figures lag behind customs collection proceeds of $2,775 million, $2,767 million, and $3,150 million over the same period in each of the years 2012, 2011, and 2010 respectively. This year-on-year drop in customs collections in can be mainly attributed to the 2.62% contraction in VAT revenues to around $1,255 million up to November, coupled with some 6.51% decline in custom revenues to $1,286 million. For the Eleven-Month Period Ending in USD Million November 2013 November % Change Custom Revenues 1,375 1,286-6.51% VAT Revenues 1,289 1,255-2.62% Custom Collections 2,664 2,541-4.63% Source: Lebanese Customs, Credit Libanais Economic Research Unit Breakdown of Aggregate Customs Collections USD Million 3,500 3,150 2,767 2,775 2,664 2,541 3,000 2,500 2,000 1,371 1,380 1,341 1,289 1,255 1,500 1,000 500 1,779 1,387 1,434 1,375 1,286 0 Up to November 2010 Up to November 2011 Up to November 2012 Up to November 2013 Up to November Custom Revenues VAT Revenues Source: Lebanese Customs, Credit Libanais Economic Research Unit The Port of Beirut continued to account for the lion s share (84.70% <$2,152.13 million>) of customs receipts up to November, trailed, and by far, by the Beirut International Airport (9.11% <$231.58 million>) and the Tripoli Port (3.63% <$92.19 million>). Breakdown of Custom Collections During the First Eleven Months of of the Year ($ Million) Port of Beirut 2,152.13 Beirut International Airport ("BIA") 231.58 Tripoli Port 92.19 Others 64.73 Breakdown of Customs Collections per Custom Office During the First Eleven Months of the Year Port of Beirut 84.70% BIA 9.11% Total 2,540.63 Source: Lebanese Customs, Credit Libanais Economic Research Unit Tripoli Port 3.63% Others 2.56% Source: Lebanese Customs, Credit Libanais Economic Research The average customs tariff rate remained flat on a monthly basis at 8% in November, yet came in higher than the 7% reading reported in November of last year. SOURCE: HIGHER CUSTOMS COUNCIL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 9

TOTAL RESERVES AT $48.81 BILLION IN The Lebanese Central Bank published its bi-weekly balance sheet this week conveying some $397.54 million contraction in the foreign assets (foreign currency reserves) portfolio to $37.86 billion as at end of year, from $38.26 billion as at mid-december. Said reserves represent 77.57% of the total reserves portfolio at BDL. Concurrently, the value of gold reserves at BDL shed $225.49 million during the second half of December to $10.95 billion (22.43% of total reserves). On an annual basis, however, foreign assets at BDL came in 7.28% higher than end of year 2013 s reading of $35.29 billion. The value of gold reserves, on the other hand, fell by $0.15 billion (1.37%) year-on-year from $11.10 billion as at year-end 2013, and this owing to the downturn in the gold commodity price throughout the year amid the upturn in US financial markets. Overall, total reserves (foreign currency and gold) at BDL added $2.41 billion y-o-y to settle at $48.81 billion as at end of December, up from $46.40 billion a year before, as elaborated hereunder: $ Billion 2008 2009 2010 2011 2012 2013 Gold 8.03 10.06 13.01 14.40 15.31 11.10 10.95 Foreign Assets 19.73 28.30 30.60 32.24 35.74 35.29 37.86 Total Reserves 27.76 38.36 43.61 46.64 51.05 46.40 48.81 Source: Banque Du Liban, C redit Libanais Economic Research Unit 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 8.03 19.73 2008 10.06 28.30 2009 Evolution of Total Reserves at Banque Du Liban 13.01 30.60 32.24 2010 Gold 14.40 15.31 2011 Foreign Assets Source: Banque Du Liban, Credit Libanais Economic Research Unit 35.74 2012 11.10 35.29 2013 10.95 The Central Bank s balance sheet also depicts a 1.37% bi-weekly contraction in BDL s total assets during the second half of December to $85.70 billion, mainly dragged by the 1.26% depreciation in the value of gold and foreign currency reserves at BDL to $48.81 billion, which outweighed the 5.43% rise in the portfolio of loans to local financial sector to $4.22 billion. 37.86 Breakdown of BDL's Total Reserves as at Year-end Gold 22.43% Foreign Assets 77.57% Source: BDL, Credit Libanais Economic Research Unit $ Billion 2013 Mid December Bi-weekly (% change) Y-O-Y (% change) Breakdown of BDL's Balance Sheet as at Year-end Total Reserves 46.40 49.44 48.81-1.26% 5.21% Securities Portfolio 12.22 13.95 13.98 0.17% 14.35% Loans to Public Sector 0.00 0.00 0.00 - - Loans to Local Financial Sector 2.30 4.00 4.22 5.43% 83.54% Valuation Adjustment 0.00 0.00 0.00 0.00% 0.00% Other Assets 15.84 19.24 18.46-4.02% 16.53% Fixed Assets 0.25 0.26 0.23-12.59% -9.84% Total Assets 77.02 86.89 85.70-1.37% 11.28% Currency in Circulation Outside BDL 2.64 2.70 2.82 4.48% 6.79% Financial Sector Deposits 57.35 67.28 67.49 0.31% 17.68% Public Sector Deposits 7.32 6.70 6.05-9.71% -17.31% Valuation Adjustment 5.59 5.35 5.40 0.92% -3.32% Other Liabilities 0.71 1.49 0.50-66.17% -29.07% Capital Accounts 3.41 3.36 3.43 2.12% 0.76% Total Liabilities 77.02 86.89 85.70-1.37% 11.28% Source: Banque Du Liban, Credit Libanais Economic Research Unit Loans to Local Financial Sector 4.92% Loans to Public Sector 0.00% Valuation Adjustment 0.00% Securities Portfolio 16.31% Other Assets 21.54% Source: BDL, Credit Libanais Economic Research Unit Fixed Assets 0.26% Total Reserves 56.96% The share of gold and foreign currency reserves at BDL advanced to 56.96% of the Central Bank s total assets as at end of year, up from 56.90% as at mid-december, yet remained below the 60.24% level recorded as at year-end 2013. SOURCE: BDL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 10

BSE ACTIVITY SOARS BY 61% IN THE FULL YEAR Activity on the Beirut Stock Exchange (BSE) was vivid during the month of December, which witnessed a block trade on Bank Audi s GDRs involving some 722,264 securities. More specifically, the BSE traded value rose to around $69.47 million in December, up from $25.15 million in November and $30.06 million in December 2013. Concurrently, traded volume surged to 10.83 million shares in December, compared to 3.44 million shares in November and nearly 3.19 million shares in December of last year. Trades mainly consisted of listed banking stocks (9,970,802 shares <92.04%>), with the lion s share (63.86%) going to Bank Audi (6,918,090 shares). The stake of listed real estate stocks was a thin 7.66% (829,686 shares) of total BSE traded volume, followed by industry & trading stocks (32,408 shares <0.30%>). As far as market capitalization is concerned, the latter reached around $11.22 billion in December, down from $11.29 billion in November, yet came in higher than the $10.55 billion reading reported in December 2013. Allocation of Traded Volume in December Allocation of Traded Value in December Industry & Trading Sector, 0.30% Real Estate Sector, 7.66% Industry & Trading Sector, 0.22% Real Estate Sector, 13.52% Banking Sector, 92.04% Banking Sector, 86.26% On a cumulative basis, the aggregate traded value on the Beirut Bourse rallied to $602.78 million in the full year, from $375.16 million during the year 2013. Traded volume was no exception, adding 104.02 million shares y-o-y to around 155.43 million shares. The BSE s weighted average Price to Book (P/BV) multiple remained flat month-on-month at 0.97x as at end of December, yet stood lower than the 1.01x figure reported in December of the previous year. On the other hand, the Price to Earning (P/E) metric rose shyly to 7.80x in December, up from 7.73x in December of the previous year. Analysis of the BSE Activity During the Year 2013 % Change Traded Value ($ 000) 375,161 602,776 60.67% Traded Volume (000) 51,412 155,427 202.32% Market Capitalization ($ Million) 10,545 11,222 6.42% Traded Value/Market Capitalization 3.56% 5.37% Turnover Ratio 3.07% 8.98% Weighted Average P/E 7.73 7.80 Weighted Average P/BV 1.01 0.97 Source: BSE, Credit Libanais Economic Research Unit Evolution of Beirut Bourse Cumulative Trading Activity 700,000 600,000 500,000 400,000 300,000 200,000 100,000 375,161 10,545 51,412 602,776 11,222 155,427 11,400 11,200 11,000 10,800 10,600 10,400 0 Dec-2013 Dec- 10,200 Traded Value ($ 000) Traded Volume (000) Market Capitalization ($ Million) SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 11

NUMBER OF BIA PASSENGERS UP BY 4.84% IN The number of passengers travelling via the Beirut International Airport (BIA) increased by 34.11% during the month of December to 573,229 (including transit travelers), up from 427,403 in November. On a cumulative basis, moreover, the number of passengers via the BIA came in 4.84% higher y-o-y at 6,567,833 during the year, from 6,264,448 passengers a year earlier. More specifically, the number of arriving travelers rose by 6.35% y-o-y to 3,222,542 in, accompanied by some 3.53% increase in the number of departing travelers to 3,332,916. On the other hand, the number of transit travelers dropped by a sharp 17.24% on an annual basis to 12,375, with the number of flights rising shyly to 63,566. Beirut International Airport 2013 During the Year % Change Total Passengers 6,264,448 6,567,833 4.84% o/w Arriving Passengers 3,030,191 3,222,542 6.35% o/w Departing Travelers 3,219,305 3,332,916 3.53% o/w Transit Travelers 14,952 12,375-17.24% Number of Flights 62,484 63,566 1.73% Source: BIA, Credit Libanais Economic Research Unit BIA's Passengers in 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000-6,567,833 Total Passengers 3,222,542 3,332,916 Arriving Passengers Departing Travelers 12,375 Transit Travelers Source: BIA, Credit Libanais Economic Research Unit BIA Total Passengers (Cumulative) 6,567,833 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 3,177,021 3,326,433 2,739,606 3,869,607 4,985,499 5,960,414 5,552,746 5,653,969 6,264,368 2,000,000 1,000,000-2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: BIA, Credit Libanais Economic Research Unit SOURCE: BIA, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 12

CORPORATE NEWS KAFALAT LOANS ATTAIN $109.55 MILLION IN The number of guarantees issued by the government-subsidized program KAFALAT contracted by 3.79% y-oy to 838 during the year, down from 871 in 2013. Concurrently, the face value of guarantees fell by 7.28% y-o-y to around LBP 165.15 billion ($109.55 million) by end of, from LBP 178.13 billion ($118.16 million) a year before. Consequently, the average value per guarantee shed 3.63% y-o-y to LBP 197.08 million ($130.73 thousand), compared to LBP 204.51 million ($135.66 thousand) in the year 2013. The agricultural sector detained the bulk (48.14%) of issued Kafalat loans during the covered period, followed by the industrial sector (35.15%) and companies operating in the tourism sector (11.21%). Kafalat Loans by Sector During the Year 2013 Y-O-Y % Change Agriculture 374 399 6.68% Industry 293 295 0.68% Tourism 142 98-30.99% Others 62 46-25.81% Total 871 838-3.79% Value of Guarantees ($ million) 118.16 109.55-7.28% Average Value per Guarantee ($000) 135.66 130.73-3.63% Source: Kafalat, Credit Libanais Economic Research Unit Industry 35.15% Breakdown of Kafalat Loans By Sector in Tourism 11.21% Others 5.50% Agriculture 48.14% Source: Kafalat, Credit Libanais Economic Research Unit The pie below depicts a high concentration of Kafalat loans in the Mount Lebanon region, amassing alone 42.77% of the total outstanding Kafalat portfolio, followed by the Bekaa (19.81%), South (11.89%), North (11.46%), Nabatieh (9.97%) and Beirut (4.10%) regions, as highlighted hereunder: Kafalat Loans by Region During the Year 2013 Y-O-Y % Change Beirut 55 32-41.82% Mount Lebanon 348 354 1.72% South 117 99-15.38% Nabatieh 64 88 37.50% Bekaa 188 169-10.11% North 99 96-3.03% Total 871 838-3.79% Source: Kafalat, Credit Libanais Economic Research Unit Bekaa 19.81% Breakdown of Kafalat Loans By Region in Nabatieh 9.97% North 11.46% South 11.89% Beirut 4.10% Mount lebanon 42.77% Source: Kafalat, Credit Libanais Economic Research Unit SOURCE: KAFALAT, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 13

MONETARY PERFORMANCE MONETARY AGGREGATES On the monetary front, all monetary aggregates ended the week of December 25, on a positive note. More specifically, the overall money supply, M4, widened by $698.37 million on a weekly basis to just over $124.30 billion, with the non-banking sector s treasury bills portfolio increasing by $15.26 million. In parallel, Lebanese-pound denominated deposits and currency in circulation, M1, rose by $335.89 million week-on-week to around $5.40 billion, thanks to some $232.17 million expansion in demand deposits and $103.48 million hike in money in circulation. Similarly, local currency term deposits, M2, gained some $397.58 million on a weekly basis and rose by 6.69% year-on-year to $48.54 billion. Consequently, private sector term and saving deposits denominated in LBP ( M2- M1 ) notched slightly higher to nearly $43.14 billion during the concerned week, with deposits denominated in foreign currencies ( M3 M2 ) firming at $68.84 billion. Money Supply USD Million December 18, December 25, % Change M1 5,068 5,404 6.63% M2 48,145 48,543 0.83% M3 116, 7 0 0 117, 3 8 4 0.59% M4 123,604 124,302 0.57% M2- M1 43,077 43,139 0.14% M3-M2 68,555 68,841 0.42% Source: Banque Du Liban, Credit Libanais Economic Research Unit 86,000 66,000 46,000 26,000 6,000 Money Supply - USD Million - 123,604 124,302 116,700 117,384 December 18, M4 December 25, Source: BDL, Credit Libanais Economic Research Unit M3 MONEY MARKETS The January 1 st Treasury bill auction raised around LBP 181.56 billion ($120.44 million). Subscriptions were majority (37.81%) concentrated in the five-year to maturity T-bonds, followed by the threemonth (33.87%) and six-month (28.32%) tenure bills. The weighted average yield on Lebanese Pound Treasury bills dropped to 5.47% during the auction of January 1, down from 5.83% in the latest auction of same maturities held on the 18 th of December. This mainly owes to the decreasing participation in the high-yielding five-year to maturity bonds to 37.81% in the current auction, from 54.84% in that of December 18 th. The yields on the three-month, six-month, and five-year term-bills remained unchanged at 4.44%, 4.99%, and 6.74% respectively. January 1, 2015 Lebanese Treasury Yield (%) Face Value (in billions % of Total Face Value Bills of LBP) 3 Months 4.44% 61.500 33.87% 6 Months 4.99% 51.421 28.32% 60 Months 6.74% 68.643 37.81% Total 181.564 100.00% Source: Reuters, Credit Libanais Economic Research Unit Lebanese Treasury Bills 3 Months 6 Months 12 Months 24 Months 36 Months 60 Months 84 Months 96 Months 120 Months 144 Months Treasury Yield 4.44% 4.99% 5.35% 5.84% 6.50% 6.74% 7.50% 7.80% 7.98% 8.74% 10.00% 9.00% 8.00% On The Run Yield Curve Months 96 Months120 84 Months 144 Months 7.00% 6.00% 5.00% 4.00% 36 Months 24 Months 12 Months 6 Months 3 Months 60 Months 3.00% 2.00% 1.00% 0.00% 0 2 4 6 8 10 12 SOURCE: BDL, REUTERS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 14

FIXED INCOME FIXED INCOME Activity on the Lebanese Eurobond market was calm this week bearing in mind that the 5.875% ROL Eurobond maturing in January 2015 and amounting to $250 million is likely to be redeemed in cash at maturity. In fact, Lebanon s five-year spreads on credit default swap hovered between 380 and 400 basis points, with static spreads increasing to 328.92 bps, from 319.13 bps last week. LEBANESE EUROBONDS Lebanese Eurobonds Currency Coupon Maturity Bid Ask Bid Yield Bid Static Spread Government Eurobonds Republic of Lebanon USD 5.875% Jan-15 100.02 100.04 3.000% 281 Banque Du Liban USD 10.000% Apr-15 101.82 102.19 3.500% 326 Republic of Lebanon USD 8.500% Aug-15 102.72 103.32 3.600% 330 Republic of Lebanon USD 8.500% Jan-16 104.69 105.47 3.750% 331 Republic of Lebanon USD 4.000% Dec-17 100.00 101.00 4.000% 273 Republic of Lebanon USD 4.500% Apr-16 100.86 101.80 3.800% 325 Republic of Lebanon USD 11.625% May-16 109.98 110.81 3.850% 329 Republic of Lebanon USD 4.750% Nov-16 101.29 102.23 4.000% 323 Republic of Lebanon USD 9.000% Mar-17 110.00 111.00 4.170% 326 Republic of Lebanon USD 5.000% Oct-17 101.00 102.00 4.610% 349 Republic of Lebanon USD 5.150% Dec-18 100.50 101.50 4.990% 368 Republic of Lebanon USD 5.500% Apr-19 101.25 102.25 5.170% 370 Republic of Lebanon USD 6.000% May-19 103.00 104.00 5.220% 374 Republic of Lebanon USD 6.375% Mar-20 104.38 105.38 5.390% 378 Republic of Lebanon USD 5.800% Apr-20 101.50 103.00 5.470% 384 Republic of Lebanon USD 6.150% Jun-20 102.75 103.75 5.560% 391 Republic of Lebanon USD 8.250% Apr-21 113.60 114.60 5.640% 392 Republic of Lebanon USD 6.100% Oct-22 102.00 103.00 5.770% 390 Republic of Lebanon USD 6.000% Jan-23 100.75 101.75 5.880% 398 Republic of Lebanon USD 7.000% Dec-24 106.00 107.00 6.180% 418 Republic of Lebanon USD 6.250% Jun-25 100.25 101.25 6.220% 418 Republic of Lebanon USD 6.600% Nov-26 102.50 103.50 6.300% 420 Republic of Lebanon USD 6.750% Nov-27 103.50 104.50 6.350% 422 Source: Credit Libanais Capital Markets SOURCE: CREDIT LIBANAIS CAPITAL MARKETS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 15

LEBANESE EQUITIES LEBANESE EQUITIES Activity on the Beirut Stock Exchange watered down this week in the absence of large traded chunks on any particular security. In fact, the number of shares changing hands plunged to 977,698 shares this week, down from 1,266,419 shares last week, with value traded slipping to around $6.13 million, from nearly $7.14 million a week before. The bulk of weekly trades (61.58%) mainly revolved around Byblos Bank s listed shares, with a shy turnover ratio of 0.11%. Credit Libanais Previous Closing Weekly Indices 2-Jan-15 9-Jan-15 % Change Credit Libanais Aggregate Stock Index <.CLASI> Credit Libanais Financial Sector Stock Index <.CLFI> Credit Libanais C onstruction Sector Stock Index <.CLCI> Source: Credit Libanais Economic Research Unit 1,095.11 1,093.56-0.14% 1,388.53 1,391.24 0.20% 633.56 625.54-1.27% Credit Libanais Aggregate Stock Index Weekly Performance CLASI In this perspective, this week s average daily trading value narrowed to around $1.53 million, down from $1.78 million last week, with the average daily trading volume receding to 244,425 shares, from 316,605 shares a week before. Six losers and six gainers were spotted this week, dragging the BSE s market capitalization down to $11.30 billion. In this context, the Credit Libanais Aggregate Stock Index ( CLASI ) reversed its upturn this week, closing 0.14% lower at 1,093.56. Index Value 1,200 1,100 1,000 900 800 700 600 CLASI 0.14% In the real estate sector, the price of Solidere A shares shed 2.18% this week to $11.22, with that of Solidere B losing 1.07% to $11.11. Consequently, the Credit Libanais Construction Sector Stock Index ( CLCI ) ended its week on a negative note, down by 1.27% to a market close of 625.54. In the banking sector, the Credit Libanais Financial Sector Stock Index ( CLFI ) notched 0.20% higher this week to close at 1,391.24. This primarily owes to the 2.62% appreciation in the price of Bank Audi s listed shares to $6.26, the 2.29% increase in the price of BEMO Bank s listed shares to $1.79, and the 1.22% rise in the price of BLOM Bank s GDRs to $9.92. 500.CLASI 09-Jan-14 02-Mar-14 23-Apr-14 14-Jun-14 05-Aug-14 26-Sep-14 17-Nov-14 Credit Libanais Aggregate Stock Index Friday, January 09, 2015 Value Daily % Chng Daily Net Chng 1,093.56 0.980% 10.66 Yr.High Year Hi.Date Yr.Low Year.Lo.Date 1,095.11 2-Jan-15 1,082.91 8-Jan-15 Life High Life Hi.Date Life Low Life.Lo.Date 1,801.01 7-Jul-08 836.11 25-Mar-09 08-Jan-15 1,500 Credit Libanais Financial Sector Stock Index Weekly Performance CLFI 800 Credit Libanais Construction Sector Stock Index Weekly Performance CLCI 1,400 1,300 750 Index Value 1,200 1,100 1,000 900 800 700 600 500 09-Jan-14 02-Mar-14 23-Apr-14 14-Jun-14 CLFI 0.20% 05-Aug-14 26-Sep-14 17-Nov-14 08-Jan-15 Index Value 700 650 600 550 500 09-Jan-14 02-Mar-14 23-Apr-14 CLCI 1.27% 14-Jun-14 05-Aug-14 26-Sep-14 17-Nov-14 08-Jan-15 SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 16

LEBANESE EQUITIES BEIRUT STOCK EXCHANGE Closing Weekly %Change Solidere A $11.22-2.18% 35,117 $395,994 100,000,000 $1,122,000 10.16 1.07-2.18% Solidere B $11.11-1.07% 19,537 $219,097 65,000,000 $722,150 10.06 1.06-1.07% BLC Bank $1.70 0.00% - - 51,033,333 $86,757 7.73 1.13 0.00%- BLC Bank Preferred Class "A" $100.00-2.91% 10,000 $1,000,000 400,000 $40,000 n.a n.a -2.91% BLC Bank Preferred Class "B" $100.00 0.00% 10,000 $1,000,000 550,000 $55,000 n.a n.a 0.00% BLC Bank Preferred Class "C" $100.00 0.00% 3,000 $300,000 350,000 $35,000 n.a n.a 0.00% Bank Audi - Listed Shares $6.26 2.62% 73,560 $443,334 399,749,204 $2,502,430 6.20 0.98 2.62% Bank Audi GDR $6.50-3.42% 1,428 $9,282 115,515,853 $750,853 6.44 1.02-3.42% Bank Audi Preferred "E" $102.20 0.00% - - 1,250,000 $127,750 n.a n.a 0.00%- Bank Audi Preferred "F" $102.80 0.59% 2,000 $205,600 1,500,000 $154,200 n.a n.a 0.59% Bank Audi Preferred "G" $101.50 0.00% - - 1,500,000 $152,250 n.a n.a 0.00% Bank Audi Preferred "H" $102.30 0.00% - - 750,000 $76,725 n.a n.a 0.00% Bank Of Beirut - Listed Shares $18.40 0.00% - - 16,822,467 $309,533 7.83 0.85 0.00%- Bank Of Beirut Priority Shares $21.00 0.00% - - 4,762,000 $100,002 8.94 0.97 0.00% Bank Of Beirut Preferred "E" $26.25 0.00% - - 2,400,000 $63,000 n.a n.a 0.00%- Bank Of Beirut Preferred "H" $26.25 0.00% - - 5,400,000 $141,750 n.a n.a 0.00%- Bank Of Beirut Preferred "I" $25.90 0.00% - - 5,000,000 $129,500 n.a n.a 0.00%- Byblos Bank - Listed Shares $1.60-3.61% 602,068 $963,879 565,515,040 $904,824 8.42 0.75 0.00% Byblos Bank Preferred Class 2008 $102.00 0.00% - - 2,000,000 $204,000 n.a n.a 0.00%- Byblos Bank Preferred Class 2009 $101.20-0.88% 3,083 $312,000 2,000,000 $202,400 n.a n.a -0.88% Byblos Bank GDR $76.00 0.00% - - 1,309,078 $99,490 8.00 0.72 0.00%- BEMO Bank - Listed Shares $1.79 2.29% 123,374 $220,273 51,400,000 $92,006 10.53 1.64 2.29% BEMO Bank Preferred Class 2013 $101.00 1.00% 2,400 $242,400 350,000 $35,350 n.a n.a 1.00% BLOM Bank GDR $9.92 1.22% 420 $4,166 73,896,010 $733,048 6.20 0.87 1.22% BLOM Bank Listed Shares $8.80 0.00% 89,043 $783,578 215,000,000 $1,892,000 5.50 0.77 0.00% BLOM Bank Preferred Class 2011 $10.20 0.00% 1,150 $11,730 20,000,000 $204,000 n.a n.a 0.00% RYMCO Class "B" $3.23 0.00% - - 10,920,000 $35,272 26.50 1.66 0.00%- Holcim Liban $15.50 1.64% 1,518 $23,529 19,516,040 $302,499 16.8 1.46 1.64% Ciment Blancs Bearer $3.75 0.00% - - 6,000,000 $22,500 13.39 2.11 0.00%- Ciment Blancs Nominal $2.75 0.00% - - 3,000,000 $8,250 9.82 1.54 0.00%- Note: n.a stands for not applicable Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit Lebanese Equities Weekly Weekly Value Volume Traded Traded Activity Analysis Previous Last % Change Value Traded ($) 7,138,327 6,134,863-14.06% Volume Traded 1,266,419 977,698-22.80% Average Daily Trading Value ($) 1,784,582 1,533,716-14.06% Average Daily Trading Volume 316,605 244,425-22.80% Market Cap - BSE ($) 11,319,825,896 11,304,538,752-0.14% Weighted Average P/E 7.736 7.695-0.54% Weighted Average P/BV 0.961 0.960-0.05% Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit 8.000 6.000 4.000 2.000 Total Listed Shares Market Capitalisation ($000) P/E Evolution of Beirut Bourse Comparable Benchmarks 7.736 7.695 P/BV 0.961 0.960 YTD Price Perf. 0.000 January 2, 2015 January 9, 2015 P/E P/BV Source: BSE, Credit Libanais Economic Research Unit The weighted average price to earnings (P/E) and price to book (P/BV) multiples of the Beirut Bourse ended their week lower at 7.695x and 0.960x on a respective basis. SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 17

LEBANON S MAIN INDICATORS Recap of Lebanon's Major Indicators 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 MACROECONOMIC INDICATORS GDP ($ Billion) 20.96 21.29 21.80 24.58 28.83 35.14 38.01 40.08 42.96* 45.02* 47.50* Real GDP Growth Rate 5.06% 2.70% 1.60% 9.40% 9.10% 10.30% 8.00% 2.00% 1.50% 1.50% 1.80%* GDP Per Capita ($) 5,438 5,339 5,343 5,937 6,888 8,274 8,756* 9,145* 9,609* 9,920* 10,086* Net Foreign Direct Investment ($ Billion) 1.99 2.79 2.68 3.38 4.33 4.84 4.96 3.40 2.30 3.79 FDI/GDP Ratio 9.51% 13.11% 12.30% 13.74% 15.02% 13.77% 13.05% 11.79% 7.86% 12.71% INDUSTRY Industrial Exports ($ Million) 1,467 1,667 1,737 2,353 2,978 2,595 3,291 3,530 2,952 3,076 2,119 (4) Import of Industrial Machinery ($ Million) 142 137 130 163 188 199 227 239 288 300 193 (4) TOURISM Total Number of Tourists 1,278,469 1,139,524 1,062,635 1,017,072 1,332,551 1,851,081 2,167,989 1,655,051 1,365,845 1,274,362 1,132,607 (6) Growth in Tax-Free Spending N.A 2% - 15% 17% 56% 13% 21% 10% -6% 4% 8% (9) REAL ESTATE Value of Real Estate Transactions ($ Million) 2,883.0 3,295.9 3,120.3 4,174.8 6,443.7 6,958.4 9,478.8 8,841.0 9,175 8,708 8,048 (7) Number of Real Estate Sales Transactions 50,582 50,057 49,051 65,681 80,018 83,465 94,202 82,984 74,569 69,198 63,580 (7) Construction Permits (000 sqm) 7,719 7,928 7,532 7,919 14,281 11,509 15,187 13,980 12,362 10,527 10,456 (7) Cement Delivery (000 tons) 2,729 3,040 3,423 3,945 4,219 4,897 5,227 5,550 5,309 5,831 3,693 (4) TRANSPORTATION Beirut Port: Freight Activity (000 Tons) 5,060 4,476 4,226 5,318 5,746 5,769 6,469 6,677 7,225 8,268 6,568 (9) Beirut Airport: Number of Passengers (million) 3.2 3.18 2.74 3.41 3.87 4.74 5.55 5.65 5.96 6.26 5.99 (7) FOREIGN TRADE Imports ($ Million) 9,397 9,340 9,398 11,815 16,137 16,242 17,964 20,158 21,280 21,228 18,845 (7) Exports ($ Million) 1,747 1,880 2,283 2,816 3,478 3,484 4,253 4,265 4,483 3,936 3,040 (7) Trade Balance ($ Million) (7,650) (7,460) (7,115) (8,999) (12,658) (12,758) (13,711) (15,893) (16,797) (17,292) (15,805) (7) BALANCE OF PAYMENTS Net Foreign Assets at the Financial Sector ($ Million) 168 747 2,792 2,037 3,460.60 7,899.00 3,325.20 (1,996) (1,537) (1,127) (867.4) (6) Foreign Assets ($ Billion) 11.48 11.66 12.97 12.39 19.73 28.30 30.85 32.24 35.74 35.29 37.86 (9) PUBLIC FINANCE Government Expenditures ($ Million) 6,992 6,768 7,880 8,350 9,922 11,388 11,336 11,675 13,321 13,640 8,899 (4) Government Revenues ($ Million) 4,984 4,912 4,853 5,804 7,000 8,428 8,414 9,333 9,396 9,420 7,242 (4) Budget Primary Deficit / Surplus ($ Million) 1,851 1,802 1,335 1,787 2,730 3,380 1,203 1,662 (110) (240) 951 (4) Total Deficit ($ Million) (2,008) (1,856) (3,027) (2,546) (2,921) (2,960) (2,894) (2,342) (3,925) (4,220) (1,658) (4) Deficit / GDP Ratio 9.58% 8.72% 13.89% 10.36% 10.13% 8.42% 7.61% 5.65% 9.23% 9.52% Debt Service / GDP Ratio 12.43% 10.88% 13.47% 13.08% 12.16% 11.49% 10.85% 9.99% 8.51% 8.55% Net Public Debt ($ Billion) 32.98 34.76 37.42 39.02 41.50 44.11 45.01 46.35 49.12 53.18 56.70 (7) Gross Public Debt/GDP Ratio 171.18% 180.70% 185.19% 171.02% 163.09% 145.57% 138.39% 133.88% 135.67% 139.68% MONETARY AGGREGATES & INFLATION M4 ($ Billion) 49.63 51.59 56.08 63.56 72.58 87.08 97.31 103.5 110.0 117.4 124.30 (8) (M2- M1) ($ Billion) 15.22 14.27 13.37 14.11 21.93 31.14 35.66 35.82 39.32 40.56 43.14 (8) Monetization Level (M2/GDP Ratio) 80.27% 74.24% 69.39% 65.76% 85.55% 97.35% 103.46% 99.31% 103.14% 102.75% Change in CPI (%) 1.70% -2.60% 5.60% 9.30% 6.36% 4.20% 6.19% 4.27% 4.68% 2.05% 0.48% (7) BANKING SYSTEM Number of Commercial Banks 53 54 54 54 53 53 54 54 54 56 56 (1) Number of Branches 799 825 830 847 860 885 912 948 962 985 986 (1) Total Assets ($ Million) 67,786 70,325 76,179 82,255 94,255 115,250 128,925 140,576 151,883 164,821 172,210 (7) Total Deposits ($ Million) 55,835 58,117 61,541 68,059 78,663 96,821 108,601 117,703 127,657 139,166 145,863 (7) Loans to the Private Sector ($ Million) 15,934 16,230 17,201 20,425 25,039 28,374 34,929 39,375 43,452 47,381 50,511 (7) Customer Loans/ Deposits 28.54% 27.93% 27.95% 30.01% 31.83% 29.31% 32.16% 33.45% 34.04% 34.05% 34.63% Dollarization Rate 68.78% 71.71% 75.16% 77.34% 69.57% 64.46% 63.24% 65.92% 64.82% 66.10% 65.68% Net Profit - After Tax ($ Million) 463 580 754 962 1,215 1,429 1,838 1,743 1,620 2,246 (1) Exchange Rate (LBP to USD) 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 * Figures Reflect IM F Estimates (1) As at End of M arch,, (2) As at End of June,, (3) As at End of July,, (4) As at End of August,, (5) As at End of September,, (6) As at End of October,, (7) As at End of November,, (8) As at December 25, (9) As at End of December, SOURCE: BDL, ABL, MOF, IMF, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 18

LEBANON S RATINGS Republic Of Lebanon Sovereign Ratings Rating Agency Tenor Rating Standard & Poor's Long- Term B- Short- Term B Moody's Investors Service Ltd. Long- Term B2 Fitch IBCA Ltd. Long- Term B Short- Term B Source: M oody's Investors Service, Standard & Poor's, Fitch Ratings Outlook Stable Negative Negative Lebanese Banks' Latest Ratings Rated Banks Moody's Investors Service Capital Intelligence Fitch Ratings S&P Ratings Long Term Foreign Currency Financial Strength Outlook Long Term Foreign Currency Outlook Long Term IDR Outlook Long-Term Counterparty Credit Rating Short-Term Counterparty Credit Rating Bank Audi B2 E+ Negative B Stable B Stable B- C Stable BLOM Bank B2 E+ Negative B Stable - - B- - Stable Credit Libanais - - - B Stable - - - - - Byblos Bank B2 E+ Negative B Stable B Stable - - - BBAC - - - B Stable - - - - - Fransabank - - - B Stable - - - - - BankMed - - - - - - - B- C Stable Sources: M oody's Investors Service, Capital Intelligence, Fitch Ratings, S&P Ratings Outlook SOURCE: S&P, MOODY S, FITCH, CAPITAL INTELLIGENCE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 19

CONTACTS RESEARCH Fadlo I. Choueiri, CFA fchoueiri@cl.com.lb 961-1-398 169 EXT: 1080 Jad Abi Haidar jabihaidar@cl.com.lb 961-1-398 169 EXT. 1083 Joelle Samaha jsamaha@cl.com.lb 961-1-398 169 EXT. 1081 Patrick Karawani pkarawani@cl.com.lb 961-1-398 169 EXT. 1082 Joanna Gergi joannagergi@cl.com.lb 961-1-398 169 EXT. 1084 MONEY MARKETS DESK Robert Araman raraman@cl.com.lb 961-1-200 028 EXT. 116 CAPITAL MARKETS DESK Gaith Mansour gmansour@cl.com.lb 961-1-322 191 This document is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. This document does not constitute an offer or invitation to subscribe to or purchase any security, and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. Reasonable care has been taken to ensure that the facts stated herein are accurate and the estimates, opinions and expectations contained herein are fair and reliable. ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-398169 FAX: 01-398169 EXT. 1085 20