Berri calls parliament session after cancellation
BEIRUT - Lebanon's dollar bonds rallied on Thursday after parliament looked set to resume next week and US President Donald Trump said Washington was ready to work with a new Lebanese government.
Several Lebanese bonds made their biggest daily gains since early November. The 2032 and 2030 issues both rose by 1.4 cents to 44 cents in the dollar, according to Tradeweb data.
Bonds prices fell to record lows in recent weeks as anti-government protests brought the country to a political standstill following Prime Minister Saad al-Hariri's resignation on Oct. 29.
Some financial market observers have said the record low bond prices indicate the country may have to default on or restructure some of its debt.
"The problem in Lebanon is reaching consensus and the political class reaching consensus and doing the right thing. Until you get the political class swept away and a new one comes into power I don't see an end game yet," said Richard House, chief investment officer, emerging market debt, at Allianz Global Investors.
The market also benefited after Trump told Lebanese President Michael Aoun in a cable that the United States would work with a new Lebanese government that responds to the needs of its people, as politicians look to form a new government needed to enact urgent economic reforms.
Lebanese House Speaker Nabih Berri on Thursday scheduled a session of parliament next week to discuss draft legislation on banking secrecy and returning stolen state funds, state news agency NNA reported.
Protests fuelled in part by anger over corruption forced parliament to postpone on Tuesday, delaying what would have been its first session in two months.
Berri called for two parliamentary committees to hold a joint session on Nov. 27 to discuss the draft laws, which echo demands of protesters who blame the country's elite for rampant corruption and steering Lebanon deep into economic crisis.
A Lebanese prosecutor referred the caretaker minister and two former telecoms ministers for trial on Wednesday on charges of wasting public funds, among the first proceedings opened against high-level officials since the unrest erupted on Oct. 17.
The parliament session that was cancelled this week was slated to reelect members of committees and discuss an amnesty law that would lead to the release of hundreds of prisoners. Protesters were angry the MPs were not tackling their demands for reform.