What Is the Beirut Stock Exchange (BSE)?
The Beirut Stock Exchange (BSE) is the primary stock exchange in Lebanon. It is one of the oldest stock exchanges in the Middle East, established in 1920.
When the BSE got its start, trading in the region mainly consisted of gold and currency transactions. Trading activity on the exchange increased in the 1950s and 1960s with the listing of various banking and industrial firms along with bonds. Today, the exchange offers a wide variety of security products.
Understanding the Beirut Stock Exchange (BSE)
The Beirut Stock Exchange is a public institution run by a committee including a chairman, a vice chairman, and eight members appointed by the Minister of Finance and the council of ministers. Each committee serves a four-year mandate.
The committee is responsible for managing, regulating, and developing the markets in accordance with Lebanese law. This includes providing adequate information on listing companies and issuers so that trading can be fair and informed, with all traders treated equally. The committee also protects the interests of all investors trading on the exchange and monitors the activities of all listed companies.
All BSE members are Lebanese joint stock companies (SAL) registered with the secretariat of the commercial register. Investment banks must have a minimum capitalization of $10 billion LBP. Brokerage firms are required to have $1 billion and financial institutions must have $2 million LBP capitalization. In March of 2021, one US dollar was equal to 1,508 LBP.
Trading on the BSE
The BSE consists of three types of markets. The first is the official market, which is for companies incorporated for more than three years and at least $3 million or equivalent in capital. The junior market is for younger companies with capital or equivalent of $1 million. The over-the-counter market is for Lebanese companies with capital or equivalent of $100,000. Shares of companies on the over-the-counter market are traded without being listed on the BSE.
The BSE provides information for potential investors to help them begin trading on the exchange. The BSE requires a person to first open a security account with a broker authorized through the exchange. The investor then issues a check to the broker including the amount they wish to invest and any brokerage fees or deposit securities. Once this is completed, the investor can then order the broker to buy or sell a security listed on the exchange, including the number of shares and the price they’re willing to pay or accept.
The BSE is open for trading Monday through Friday from 9:30 a.m. to 12:30 p.m. Brokers also trade electronically during these hours, rather than in person.