Buoy­ant Tu­nis bourse hopes for state IPOs to draw in­vestors

Gulf Times Business - - BUSINESS -

Tu­nisia’s stock in­dex is up an im­pres­sive 20% this year, but is be­ing held back by the fact that the big­gest firms are all sta­te­owned and un­able to at­tract pri­vate in­vest­ment, ac­cord­ing to the head of the Tu­nis Stock Ex­change.

A mar­ket cap­i­tal­i­sa­tion of just $10bn 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% 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.

Fear­ing new at­tempts at pri­vati­sa­tion, the UGTT um­brella union has called a na­tional strike for Oc­to­ber 24.

In any case, po­lit­i­cal pos­tur­ing ahead of an election due in a year’s time has al­ready cost Cha­hed the sup­port of his own party and left his govern­ment hang­ing by a thread. The chance of any at­tempts at even par­tial pri­vati­sa­tion be­fore 2020 at the ear­li­est ap­pears slim or non-ex­is­tent.

But Sah­noun is un­daunted. “List­ing shares in ma­jor state com­pa­nies such as Tu­nisie Tele­com or the to­bacco com­pany (Regie Na­tionale des Tabacs et des Al­lumettes), or AGIL (the fuel dis­trib­u­tor So­ci­ete Na­tionale de Distri­bu­tion des Pétroles) would be very ben­e­fi­cial to the health of these com­pa­nies, the eco­nomic re­cov­ery and the im­age of the stock mar­ket,” he said.

Men walk out­side the Bourse de Tu­nis (Tu­nis Stock Ex­change) build­ing in Tu­nis, Tu­nisia. A mar­ket cap­i­tal­i­sa­tion of just $10bn 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.

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