Habib Battah
Daily Star staff

BEIRUT: Shares in Solidere, Lebanon’s largest company, fell by 15 percent on Friday after local markets reopened for the first time since the assassination of the company’s founder and the country’s former Prime Minister Rafik Hariri.
Solidere closed at $8.08 on the Beirut Stock Exchange (BSE), where it represents some 65 percent of the volume of trading.The company’s capital is valued at around $1.6 billion.
Hariri, the largest single shareholder, set up Solidere in the early 1990s to rebuild the heart of downtown Beirut which was completely devastated at the end of the 1975- 1990 civil war.
Some analysts saw Friday’s drop as a short-term adjustment that could potentially spawn increased investment in both the company and the country at large.
“It was expected,” said one Beirut-based analyst. “Lower levels may continue through Monday and Tuesday, but at a certain point, we are going to buy again. “There is a panic sentiment in the market, but this could be an opportunity for a lot of investors,” the analyst added, suggesting an uptick in buying Solidere stock if prices hit a high of $9-$9.50 or a low of $6-$7.
“Investors are always looking for an opportunity. This could be a very good time to get into the market.” Raja Makarem, the managing partner of Lebanon’s Ramco Real Estate Advisors, said he has been solicited by three inquiries for buying land in Beirut in recent days from “important foreign investors.” “I don’t really know what to make of it,” he said.“We are entering an unknown period, we don’t know what’s there for us yet.
It’s normal that any serious investor would want to watch and see what happens in the next few weeks.” But Makarem voiced confidence in Solidere, which, after completing restoration of much of the historic city center, is now engaged in its second phase that is expected to see a new financial district and city park built over a massive landfill off the Mediterranean coast.
“Today thousands will follow up with the determination of Hariri to rebuild Lebanon and put it on the right track,” he said. “His children seem to be very qualified to carry on. I think the unity of Lebanon now is more important than anything happening in the last months and years. This will give confidence to tourism and investors.”
Solidere was scheduled to be listed on the Kuwaiti stock exchange at the end of February, the first Lebanese company to do so. But one Solidere official said the company would withhold comment on the move until next week. Solidere posted a $12.5 million profit in the first half of 2004, up by 114 percent over the same period in 2003.
The real estate giant listed its stocks on the BSE in September 1996 with an opening price of $113.5 for A shares and $116 for B. But the company split the stocks 10 to one in 1997.
Solidere stirred controversy at its outset when it expropriated much of downtown Beirut’s devastated properties from original landowners and compensated them with shares that plummeted below $5 from a high of $15 in 1997.