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Tunisia: He sees all indices flashing red, but remains optimistic, Bilel Sahnoun explains why

The Tunis Stock Exchange begins the year 2019 in red. And does not hide it. “After a strong performance of 14.45% in 2018, Tunindex started the year with a quarterly loss of 5.64%, closing at 6,861.49 points.

Tunindex20 experienced the same downtrend as Tunindex, with a quarterly decline of 6.43% and closing at 3,039.78 points.

The balance sheet of sector indices published by the stock market is negative. Of the 13 indices (sectors and sub-sectors), 12 performed negatively except for the “Base Materials” index.

The capitalization of the market decreased by 1.216 billion DT, i.e. down 4.99% to 23.164 billion TD against 24.380 billion TD at the end of 2018.

At that year, 2018, all listed companies and essentially banks have exploded their numbers. About sixty companies saw their revenues rise compared to the previous year.

And the global income of listed companies had then increased by 12.2% to 16.2 billion TD in 2018, against 14.5 billion TD in the year 2017.

However, it seems that this will-o’-the-wisp of 2018 has been for the moment a flash in the pan. In any case, the CEO of the TSE has an explanation.

According to him, it is “the poor estimate of the impact of monetary policy on the banking sector which represents 50% of the stock market capitalization. That policy has aroused much apprehension among traders. There is also the drying up of liquidity on the market.

This drop is clearly reflected in the 18.4% decline in trade volume, which went from 614 MD to 501 MD from one quarter to the next.

Since, supply exceeded demand, this inevitably pushed prices down, and the same for the volume treated,” explains Bilel Sahnoun.

According to him, “even if there is a beginning of improvement, with the slight recovery of phosphate production, a better oil production and a confirmation of the recovery of the tourism sector, these positive indicators do not seem to still want to give their effect on the financial market.

This will probably emerge and especially in the bottomline of banks. The CEO of the Tunisian stock market explained that “a rise in the BCT’s key interest rate, therefore the MMR and therefore an increase in the intermediation margin of banks should boost the results of the end of the 2019 semester of banks”.

And even if the CEO of the Tunis Stock Exchange remains optimistic, “in view of the macroeconomic indicators that indeed encourage optimism”, as he ends by saying, Sahnoun is still careful.

“When refinancing with the BCT is cut, with the underlying Assimilated treasury bills (BTA) from 60% to 40%, increasingly scarce liquidity, arbitrations on classified claims and the level of provisioning, everything can be clear only at the end of the first half of 2019.


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