Tunis bourse eyes IPOs to draw investors

TUNIS, Oct 10, (RTRS): Tunisia’s stock index is up an impressive 20 percent this year, but is being held back by the fact that the biggest firms are all state-owned and unable to attract private investment, according to the head of the Tunis Stock Exchange.

A market capitalisation of just $10 billion makes the bourse one of the smallest in North Africa, yet it was the region’s strongest performer in the first nine months of 2018.

In an interview, Bilel Sahnoun said this growth had been driven by reforms including “parity between local and foreign investors and a strong IT management system”.

With its 81 listed small and medium-sized companies, the exchange accounts for only 10 percent of investment in the domestic economy.

The financial intermediary and investment manager Tunisie Valeurs is the only company to have conducted an IPO so far this year, and a second one will be listed by the end of this year.

“Between three and five other companies will be listed in textile and real estate next year, which will raise the number of listed companies to about 85-86 compared to less than 50 in 2011,” Sahnoun said. But he hopes that privatisations could double this share within five years.

“The Tunis stock market is not on the radar of some big investors because it ... does not include large companies able to attract those who can create investment and help to promote economic growth and wealth creation,” he said.

But the path to securing those listings is a rocky one.

Prime Minister Youssef Chahed is committed to “reform” of the large state sector, as is the Islamist Ennahda party that is in coalition with his Nidaa Tounes, but the subject is highly sensitive.

In 2011, Tunisie Telecom cancelled plans for a joint IPO in Tunis and Paris after consultations with trade unions, who had been threatening industrial action if there were job losses.