S&P Dow Jones Indices (S&P DJI) is studying removing Lebanese stocks from several of its indexes.
In a statement on Friday, S&P DJI said that it was considering excluding Lebanon-domiciled stocks from the S&P Frontier BMI and related sub-indexes, in addition to the S&P Pan Arab Indices.
If implemented, the decision, which is being reviewed with market participants, would impact Solidere, Bank Audi, Byblos Bank, and BLOM Bank — 4 of the biggest listed Lebanese companies.
S&P DJI, a division of the rating agency S&P Global, also pointed at the possibility of reclassifying Lebanon from a frontier market to a standalone market.
This means that Lebanese shares would be exclusively listed in a standalone index.
S&P DJI noted that it had already taken measures to address what it called the “ongoing market accessibility issues in Lebanon,” which were caused by the adoption of capital controls by the crisis-hit country.
“S&P DJI continues to monitor the situation, but substantive progress does not appear to have been made to address the accessibility issues caused by these controls,” the statement said.
Lebanon has not formally imposed capital controls, but banks have nonetheless introduced measures that limit U.S. dollar withdrawals as the local market suffered a shortage of the currency.
S&P DJI explained that the consultation exercise regarding this issue will last until May 14th, indicating that the removal of stocks could take place at an upcoming rebalancing of its indexes before markets reopening on June 21st.
