Upside Ahead, But Liquidity And Diverisification Issues Remain

January 2007 | Market Strategy

The Tunisian Stock Exchange Index has seen quite substantial gains over 2006, rising by around 30% in line with the regional equity boom. While we remain bullish on the index there are substantial downside risks. Foreign equity investment regulations were liberalised in 2005, and although this has not resulted in a substantial increase in foreign purchases, we feel there are opportunities in Tunisia. Despite the run-up Tunisian equities remain fairly cheap, with a price-earnings ratio of about 10.5x as of December 2006.

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