Source: ArabNet, Byblos Research

In its annual assessment of the market accessibility of 85 developed, emerging and frontier equity markets, global portfolio analytics and indices provider MSCI, Inc. maintained Lebanon in its Frontier Markets category. It evaluated the country's stock market based on five accessibility criteria that are openness to foreign ownership, ease of capital inflows and outflows, efficiency of the operational framework, the availability of investment instruments, and the stability of the institutional framework. 

In terms of openness to foreign ownership, MSCI said that there are no constraints on foreign ownership of stocks listed on the Beirut Stock Exchange, except for Israeli nationals who are formally prohibited from investing in Lebanese companies. As such, Lebanon is, along with Sri Lanka, the only frontiers markets with a "no major issues" rating in terms of investor qualification requirements, as the remaining countries have a "no issues" rating. Also, it is one of 12 frontier markets with a "no major issues" rating in terms of equal economic and voting rights to foreign investors. Further, Lebanon is one of 22 frontier markets with a "no issues" rating in terms of foreign room level, which is mainly the proportion of shares still available to foreign investors. It is also one of 21 markets with a "no issues" rating in terms of foreign ownership limit.

Regarding capital inflows and outflows, MSCI said that there are no restrictions on capital flows to and from Lebanon and placed Lebanon among 18 frontier markets with a "no issues" rating in terms of capital flow restrictions. But it noted that there is no offshore currency market and that there are constraints on the onshore currency market, as foreign investors are not allowed to hold Lebanese pound balances. As such, it placed Lebanon among eight markets with an "improvements needed" rating in this area.

Regarding the efficiency of the operational framework, MSCI considered that the market entry process needs to improve, as registration is mandatory and may take up to five days. Lebanon is among 11 frontier markets that received a "no major issues" rating in terms of market regulations, and one of six markets to get the same rating in terms of information flow. In addition, MSCI said that almost all market infrastructure indicators need improvement, except for trading where Lebanon has a "no issues" ratings. In terms of custody, it indicated that there is no formal segregation between custody and trading accounts for transactions on the Beirut bourse. It added that there is an absence of global custodians accessible to foreign investors. In terms of transferability, it said that in-kind transfers and off-exchange transactions are prohibited.

Finally, MSCI modified the rating of Lebanon on the stability of the institutional framework category from the "no major issues" category to the "improvements needed" category due to the political situation in the country. Lebanon is one of 23 countries worldwide that fall under MSCI's definition of Frontier Markets. The other Arab markets in the same category are Bahrain, Jordan, Morocco, Oman and Tunisia. In November 2007, MSCI included Lebanon in its MSCI Frontier Markets Index, a fully investable index for frontier equity markets. The index contains stocks from 27 developing markets in Asia Pacific, Emerging Europe, the Middle East & Africa, and the Americas.

The Ministry of Public Health launched on May 31, 2019 its national strategy to combat smoking in Lebanon, coinciding with the World No Tobacco Day. The strategy calls for the implementation of Article 13 of the World Health Organization Framework Convention on Tobacco Control, which prohibits tobacco advertising, promotion and sponsorship. 

It also stipulates the enforcement of several Lebanese laws issued in 1995, 2007, 2011 and 2012, all of which warn about the dangers of smoking, control the manufacturing and import processes of tobacco products, as well as impose elevated penalties on non-compliant parties. Specifically, it calls for the implementation of Law 174, which was enacted in 2012, that aims to combat smoking and regulate the production, packaging and advertising of tobacco products in Lebanon.   

In addition, the strategy calls on the Council of Ministers and Parliament to draft and approve the necessary legislation that would increase the rates on tobacco products. Also, it stressed the need to stop the smuggling of cigarettes across the Lebanese borders and the sale of such products in the country. 

The strategy also bans the distribution of free samples of tobacco products, and prohibits supplying minors who are under 18 years old with any tobacco product. It stipulates imposing strict fines on any restaurant that serves shisha to minors, ranging from paying large penalties to closing the facility. The ministry emphasized the need to enforce the strategy, as well as to increase oversight, which can be achieved through the effective cooperation between the Ministry of Public Health, the Ministry of Economy & Trade, the Ministry of Interior & Municipalities, the Ministry of Tourism, the Ministry of Information, and security agencies.

The World Health Organization indicated that about 38% of Lebanese adults are current smokers. It noted that 40% of students in public and private schools, who are between 13 and 15 years old, are exposed to smoking at their homes and at public spaces.