Tunis Stock Exchange expects listings boom

Tunisia's stock exchange expects a surge in new listings between now and the end of the year as political risk eases following the establishment of a new government. Fifteen companies have applied for initial public offerings, which would expand the number of listed companies by a quarter, said Mohamed Bichiou, general director of the Tunis Stock Exchange. However, he urged the Islamist-led government to encourage major public companies to list to make the bourse more attractive to foreign investors.
"The government does not exercise any pressure ... but the state must play a positive role through the inclusion of major public companies in the stock market, which would expand the size of the Stock Exchange and attract foreign investors," he said in an interview with Reuters.
The exchange has already seen three IPOs launched this year and with a further 15 in the pipeline there should be 75 listed companies by the end of the year, Bichiou said. They will include Tunisiana, the country's biggest telecom operator, which is owned by Qatar Telecom and delayed its listing last year due to political turmoil in Tunisia. "I am optimistic ... Tunis's bourse will achieve a real take-off this year because of the strong entries this year, and I expect that all the indicators will be positive," Bichiou said.
The bourse, established in 1969 and a private entity since 1994, draws an average daily turnover of 6.2 million Tunisian dinars ($3.85 million), according to Bichiou, making it the third-biggest bourse in North Africa after Egypt and Morocco. Foreign investors account for about 20 percent of turnover, a spokesman for the exchange said.
Only two companies listed last year. This year companies are taking advantage of a more stable economic environment as the political crisis that followed the uprising that toppled former President Zine El Abidine Ben Ali two years ago, sparking the Arab Spring, has eased.
Bichiou said the 15 companies seeking a listing came from across sectors including technology, aviation and textiles. Tunisiana will be the first telecoms company on the bourse. However, to attract more foreign investors the bourse needs more big public companies that are competitive in their industries such as state steel company Foulahdh, Bichiou said.
Bichiou said he expected the Tunis bourse's benchmark stock index, the Tunindex, to recover this year due to the improving political and economic climate, which should boost corporate profits. Tunisia's economy grew 3.6 percent last year and the IMF forecasts it will expand 4 percent this year. The government is close to securing a $1.75 billion precautionary credit line from the IMF to help improve its financial situation and political turmoil has eased since the appointment of a new government in March.
The Tunindex fell 3 percent last year, erasing a rebound in the first half as investor sentiment was hit after an attack on the US Embassy by hardline Islamists last September. The stock market suffered a new setback this year with the assassination of opposition politician Chokri Belaid in February but Bichiou is confident it will pick up. "I expect that the index will be positive this year because of new listings in the coming months, the improvement in the economic situation and rising profits at several companies listed on the stock market," Bichiou said.