Archive for the 'Tunisia' Category
November 28th, 2011 by Tom Minney
Share prices on the Tunisian Stock Exchange (Bourse de Tunis – www.bvmt.com.tn) have been moving ahead all November, starting with a positive reaction to the meeting between Rachid Ghannouchi, leader of the Islamist Ennahda party and stock market executives only days after the election and moving forward as the politics progressed well. Even before the election results were finalized from the 23 October election that swept Ennahda to power, Ghannouchi was meeting the bourse on 26 Oct to send the message that the government would be “business friendly”. It is the first Islamist party to win power since Hamas’ 2006 victory in Palestine.
According to Bloomberg, the TUNINDEX dived from a close of 4636.67 on 20 Oct to 4538.41 on 24 Oct, but bounced back very fast and reached 4718.16 by 8 Nov. The index has been moving sideways since 4730.69 close on 18 Nov, back to levels last seen in early February. The low was 4033.43 on 25 Feb. The recent high was 5695.82 on 30 Sept 2010.
According to a report on Reuters, a party official said Ghannouchi met the market executives “to send the message that the stock exchange is very important and that he is in favour of more listings to accelerate economic growth and to diversify the economy.” Reuters adds that the Tunis stock market index fell sharply when trading resumed after the Sunday election, but rallied on news of the meeting and prices were up 1.13% by mid-morning.
Reuters reports that Ghannouchi spent 22 years in exile in Britain and has stressed his party will not enforce any code of morality on Tunisian society, or the millions of Western tourists who holiday on its Mediterranean beaches: “He models his approach on the moderate Islamism of Turkish Prime Minister Tayyip Erdogan”, according to writers Tarek Amara and Christian Lowe.
Tunisia’s Constituent Assembly held its historic first session on 22 Nov and Ghannouchi signed a coalition agreement with the heads of two junior coalition partners, Moncef Marzouki of Congress for the Republic and Mustafa Ben Jaafar of Ettakol. In the election, which saw a turnout of over 90% of registered voters, Ennahda took 89 seats of the 217-member assembly, Congress won 29 and Ettakol 21. Under the new agreement, Ennahda secretary-general Hamadi Jbeli will hold the most powerful post of prime minister, while Marzouki will be in the largely ceremonial role of Tunisian president. Ben Jaafar will be speaker of the assembly, which has the task of drafting a new constitution. They pledged to hold elections within a year.
There is a challenge to get the economy moving. Reuters cites Central Bank of Tunisia (www.bct.gov.tn) governor Mustafa Kamel Nabli saying on 24 Nov that the economy grew 1.5% in the third quarter but growth in 2011 will be close to zero. Unemployment stood at 18.3%. However, the draft budget presented earlier in November foresees 4.5% growth in 2012, after 3.7% growth in 2010. Nabli told Reuters “”We expect GDP growth of 4 percent next year but the European crisis will dampen these figures.” The World Bank, European Union, the African Development Bank and the French development agency has been giving an emergency $1.4 billion funding package. Nabli said another $5 bn will be needed next year to support the budget.
October 20th, 2011 by Tom Minney
Moving back to Cote d’Ivoire may be on the agenda for the African Development Bank (www.afdb.org), according to an interesting story on the website www.devex.com (you may have to sign in to read it?). The bank fled from Abidjan in a rush in 2003, as rebels advanced on Abidjan in the brutal and all-encompassing civil war. Now the new Cote d’Ivoire President Alessane Ouattara wants it back. and it was on the agenda at the bank’s AGM in June in Lisbon, although it may take up to 3 years before this happens.
The article also notes that the bank is increasingly important and playing a bigger role as an African institution in channeling funding to African projects.
In January 2011, the bank lived through Tunisia’s jasmine revolution, although one bank staff member told me that it did not much affect the area around their building, as street action was mostly concentrated in other parts of town. They did miss a few days work, before bosses had them back in action.
According to the article, AfDB president Donald Kaberuka said uncertainty over the permanent location of the bank had a “significant effect” on morale, frustrated “horizon planning” and was difficult for the human resources department. Some bank staff may be happy to leave Tunis, others not.
Ouattara, who got into power in April 2010 after being blocked by his predecessor, Laurent Gbagbo who disputed the election result, is moving fast to re-establish Abidjan as the financial hub for West Africa and has been lobbying hard for the bank. It is not sure what the criteria for the move are, but it is possible they will need to see at least another successful multi-party election and a period of stable government.
The AfDB attended Ouattara’s inauguration and was a leader in an accelerated package of loans to help the new administration and initial renovation has started for the bank’s headquarters in Plateau district, according to the article.
New confidence, bigger role going forward
Then bank also led multilateral lenders to sign of $1 billion in loans to Tunisia’s new administration. Kaberuka, a former finance minister from Rwanda, reportedly says that after the political shocks, swift intervention can limit collateral damage. The African Development Bank is credited for its role after the 2008 global financial crisis in encouraging African states to apply fiscal restraint but to ease potential economic disruption through investment in infrastructure, and many countries are praised for successful countercyclical interventions.
The article also argues that the bank is increasingly the biggest and best bet for Western donors who are its principal shareholders. Experienced author Mark Ashurst writes: “As the bank’s loan book grows bigger and more diverse, donors, including the United States, Germany and the United Kingdom, are keen to devolve the task of managing their African exposure to an African institution.” He adds that the bank has done a skilful job of developing a terminology that avoids words such as “conditionalities” and uses “policy-based lending” and success in developing the skilful balancing acts required to work with nations. It also reflects aspirations for greater African voices in international development policy and it is likely that more international financial institutions could devolve administrative work to the AfDB.
In 2010 the African Development Bank passed the World Bank and became the leading source of multilateral financing for new African infrastructure. The same year, the bank’s sixth general capital increase included pledges to treble the bank’s reserves to $100 trillion by 2021, signalling new confidence. The bank’s loan book is stsill less than the sum of China’s resources-for-infrastructure swaps but the AfDB is much more closely involved than other lenders in African institutions such as the African Union and the Economic Commission for Africa and has a unique standing in the regard with which it is seen in Africa.
The article goes on to argue about the bank’s changing role as growth of 5% a year or more becomes the norm in Africa for coming years. This includes work to support bond and capital markets and leveraging private capital (20%), infrastructure (40%), budget support (20%), industries, including mining and manufacturing (20%). It is well worth reading Mark’s article in full here.
September 27th, 2011 by Tom Minney
Mark Voss of fund manager Silk Invest (www.silkinvest.com) foresees a turning point for the Egyptian market in a recent note. He also notes growth in Tunisia, with companies back to pre-revolution levels, tourism boom in Morocco, giant growth in Ghana and telecom payments innovation in Kenya.
He says the company clearly sees value in the market, but the evolving politics has cast a cloud on investor sentimenty. “We believe this is now lifting as the country’s election commission chief announced a roadmap for parliamentary elections – and a crucial step in transitioning to civilian rule, from 21 November to 4 March 2012. This should also pave the way forward for the Presidential elections by early next year. Going forward, we suspect that this may mark a turning point in the market’s fortunes.” He adds that there is no shortage of lenders to help the country get back on its feet. He adds that core inflation was 6.9% in August from 8.7% in July and Suez Canal revenues climbed 8.5% year-on-year in August.
Also on the post-revolutionary theme, he looks at Tunisia and said it “continued its upward trend with many companies now back at their pre-Jasmine revolution price levels”. Tourism in Morocco was surging and by end of July was up nearly 10% year on year.
For the rest of Africa he pointed out that the IMF forecasts 13% GDP growth for Ghana this year and noted the Chinese gave a US$3 billion loan for further infrastructure developments. In Kenya: “interest rates were notched slightly up to help control inflation and reduce local currency volatility. Following an unexpected increase in harvested maize, food inflation in the country is expected to decline”. Telecoms innovation continues full speed in Kenya, as Airtel Kenya unveiled an online payment system enabling mobile subscribers to use handsets to make purchases online, while Safaricom and I&M Bank launched a service that allows M-pesa customers to transfer money from their accounts to a pre-paid visa card – which can be used globally.
August 25th, 2011 by Tom Minney
Tiny, small and medium businesses in Egypt and Tunisia, later Algeria and Morocco, are set to benefit from a new €30 million ($43.2 mn) SANAD Fund for MSME (www.sanad.lu). This was set up in August 2011 by German development bank KfW Entwicklungsbank with funding from the German Ministry for Economic Cooperation and Development and the European Commission and will offer debt and equity financing to partner institutions in the Middle East and North Africa (MENA) region that serve micro, small and medium enterprises (MSMEs). Other target countries include Middle Eastern countries such as Lebanon and Jordan.
The fund is expected to attract further investments from public and private bodies. The partners who will help invest the money will be banks, microfinance institutions, financial service providers, leasing and factoring companies, guarantee funds or venture capital funds. The fund will also offer them technical help to build their skills and reach.
Development finance alternative asset manager Finance in Motion GmbH (www.finance-in-motion.com) and Oppenheim Asset Management Services S.à r.l. (www.oppenheim.lu) will manage the new fund which will be structured as a Luxembourg-based Specialized Investment Fund, SICAV-SIF, involving different share classes.
By facilitating access to finance in the region, SANAD – literally “support” in Arabic – aims to strengthen the MSME sector and local financial markets in the MENA region in line with the principles of responsible finance.
August 25th, 2011 by Tom Minney
Tunisia’s stock exchange, the Bourse des Valeurs Mobilières de Tunis (www.bvmt.com.tn), aims to play its role in faster economic growth in coming years. On 9 July, Mr. Mohamed fadhel Abdelkefi, President of the BVMT’s management committee, announced a 5-point development strategy for 2011-2013. This will include:
1. Develop the financial market culture and awareness through media and education outreach campaigns and open days
2. Deepen the capital market by making more companies eligible to list
3. Further develop the bond market including possibly a secondary mortgage market
4. Improve the IT platforms, including a new electronic trading and information platform in 2012
5. Develop BVMT staff and human resources through additional training programmes.
There are 58 companies listed for trading. According to CEO Mohamed Bichiou foreign participation makes up about 20% of the market capitalization, which was TND 13.2 billion ($9.6bn) on 30 June. At its 2011 peak on 7 January the TUNINDEX was at 5,217.41, before crashing 23% to a low of 4,033.43 on 25 February after the stock exchange closed during the revolution. It then gained, slipped back to 4,077.05 on 26 May but has since been climbing well and closed at 4,476.94 on 24 August, up 9.8% in 3 months. The construction and building materials index has been the best performing followed by industrial and basic materials companies, while banks have been the worse performing (many investors expected them to take hits on loans to people linked to the former regime of President Ben Ali), followed by insurers.
The first listing of 2011 was technology company Telnet Holding on 23 May at the new BVMT headquarters. The IPO for 2,070,000 shares at TND5.80 each had closed after attracting 3,950 applicants and being 3.2 times oversubscribed. The share started trading at 6.37 and closed on 24 Aug at 9.70. The BVMT is seeking to encourage more listings. During 2010 there were 5 listings, partly encouraged by the reintroduction of tax incentives for companies which list more than 30% of their capital before 2014 to benefit from a 5-year reduction in corporate tax rates, from 30-35% (depending on the sector) to 20%. They included Carthage Cement, one of the most active stocks this year, which raised TNB134.9mn ($98.7mn), and automobile distributor Ennakl which raised TND128.4mn ($93.7mn) as well as insurance company Assurances Salim, reinsurer Tunis Re and Modern Leasing.
Recently the World Bank, African Development Bank, European Union, and Agence Francaise de Développement said they would finance a programme of reforms covering administration, the financial sector, and social services. The World Bank has reportedly offered to lend $500mn for this. Tunisia is in a recession after 2 quarters of GDP shrinkage, including 3.3% in the first quarter. In June the World Bank said it expects GDP growth of 1.5% for 2011, and said Tunisian industrial output was down by more than 15% in the first part of 2011, while foreign tourists’ arrivals fell 45% in the first quarter of the year. The bank says “the pace of economic activity should pick up in Tunisia in 2012” although no rate was given and would be around 5% in 2013.Creating jobs is a key challenge.
April 4th, 2011 by Tom Minney
Tunisian financial authorities have ordered stockbrokers not to allow 123 companies to buy or sell securities. A report by Reuters says that there is a confidential list issued by regulator Conseil de Marche Financier, which is trying to investigate the extensive holdings of President Zine Al-Abidine Ben Ali’s extended family.
The list is mostly privately held Tunisian companies. It includes the parent companies of 2 listed Tunisian firms, BINA Corporation, majority shareholder of Carthage Cement as well as Princesse Holding which holds stakes in Ennakl Auto and Bank Ziytouna, as well as Dubai’s Shuaa Capital. Another holding company on the list is Tunisia’s Investec which is controlled by Marwan Ben Mabrouk, son-in-law of Ben Ali, and owns a stake in mobile operator Orange Tunisie. On 31 March the interim government seized Ben Mabrouk’s 51% stake.
A stockbroker told Reuters: “We were told not to let these companies invest or withdraw money from their trading accounts. Their accounts are frozen.”
A spokersperson for Shuaa Capital, an investment bank listed in Dubai, said: “Shuaa Capital has no past or current dealings with the former president of Tunisia.”
The interim government recently said it would freeze assets of 112 people close to the ousted president pending the completion of investigations into corruption.
Egypt is also seeking to investigate businesspeople who benefitted from links to Mubarak’s regime, and many people’s assets have been frozen there too.
February 28th, 2011 by Tom Minney
Tunisie Telecom (www.tunisietelecom.tn) has cancelled plans for a joint initial public offering on the Paris and Tunis stock exchanges after consultations with trade unions following several changes of Government in recent weeks and the resignation of the former president, Zine al-Abidine Ben Ali.
Tunisie Telecom is the incumbent telecommunication network and service provider and offers fixed, mobile and satellite telephony services and ADSL services to residential and business subscribers through five Internet Service Providers.
Tunisia’s official TAP news agency on 10 Feb quoted a company statement: “Following discussions with trade unions, Tunisie Telecom and the union have reached agreement … to cancel all procedures for listing Tunisie Telecom on the stock exchange and to halt all the privatisation programmes of Tunisie Telecom.”
Earlier in February Secretary of State for Communication Technologies Sami Zaoui said plans for the offer were suspended pending consultations. Workers at the company had been threatening industrial action, but this was dropped after the news that the listing had been cancelled.
The Tunisian Government holds 65% of the shares, with the rest held by Dubai’s TECOM Investments and Dubai Investment Group. It had aimed to be the first Tunisian company to list on NYSE Euronext Paris and on Bourse de Tunis (www.bvmt.com.tn).
In mid-December Tunisie Telecom had filed a 555-page reference document with regulators Conseil du Marché Financier in Tunis and Autorité des Marches Financiers in France.
December 22nd, 2010 by Tom Minney
Tunisie Telecom (www.tunisietelecom.tn) has announced the first stage of registration with the aim of listing on the Tunisian stock exchange Bourse de Tunis (www.bvmt.com.tn) and NYSE Euronext Paris (www.euronext.com). It filed a 555-page reference document filed with regulators Conseil du Marché Financier in Tunis (www.cmf.org.tn), and also with French financial markets regulator Autorité des Marches Financiers (www.amf-france.org) on 17 December.
The filings are the first steps towards an Initial Public Offering (IPO) of shares on the Tunis and Paris stock exchanges, subject to market conditions and approval of the IPO prospectuses by the two regulators.
Tunisie Telecom is the incumbent telecommunication network and service provider and offers fixed, mobile and satellite telephony services and ADSL services to residential and business subscribers through five Internet Service Providers. It is 65% owned by the Government, but in May 2006 a consortium of Dubai’s TECOM investments and Dubai Investment Group acquired a 35% shareholding.
On offer will be a reported 20% of the shares, half each from the Government and from TECOM-Dubai, according to a useful story by Reuters newsagency, citing Tunis bourse Chief Executive Mohamed Bichiou. The listing could be planned for the first quarter of 2011.
Tunisia’s population is about 10 million and it has an open business climate and moved fast to adopt third generation 3G mobile technology. The telecoms market has expanded this year, after France Telecom started fixed and mobile operations. In September 2010, Tunisie Telecom was awarded the second 3G licence reportedly after paying about $80 million. It joins France Telecom’s local unit Orange Tunisie which had the first 3G licence.
Reuters reports that in November, Egypt’s Orascom Telecom sold its 50% stake in another Tunisian mobile operator Tunisiana for $1.2 billion. The buyer was a consortium that included Qatar Telecom’s Kuwaiti unit Wataniya and which already owned 50% of Tunisiana.
The IPO will be the biggest on the Tunis exchange in recent years. Tunisia’s emerging equities market has been increasing its profile this year, and this will be enhanced by the Paris dual-listing, Reuters reports that the previous foreign listing by a Tunisian firm was on Morocco’s stock exchange.
The reference document includes IFRS accounts for the years to December 2007-2009 and provisionals to September 2010.
December 6th, 2010 by Tom Minney
According to an interview on America.gov, the firm NYSE Euronext Inc. (www.euronext.com) — the home of the New York Stock Exchange and other exchanges — has seen a threefold increase in the trading of African stocks on its exchanges over the past 5 years and twice as many exchange-traded funds (ETFs) focused on Africa in the past 12 to 18 months.
Altogether, these increases stand as clear evidence of a “strong and growing focus” on doing business in Africa, said Stefan Jekel, managing director for Europe, Middle East and Africa at NYSE Euronext, last month in the interview: “The measure of trading in African firms on our platforms has basically tripled in the last 5 years..So we now have three times the liquidity in African stocks today on our platform compared to 5 years ago.”
There are 16 African stocks listed and traded on NYSE Euronext from 6 African countries: Cameroon (1), Cote d’Ivoire (1), Gabon (1), Morocco (3), Senegal (3) and South Africa (7). The total market capitalization of those listed African companies is $90 billion.
For a fund that give investors a cross-section of African companies, Jekel suggested the many Africa-focused ETFs. “We have seen the number of exchange-traded funds that are focused on Africa double in the last 12 to 18 months. There are funds that cover South Africa, Africa, Africa’s top 40 investments, and those are all available on our platforms here in Europe and the U.S. … all with different specializations, differentiations. … So investors find a variety of solutions and opportunities to participate in the growth that can be found across Africa.”
NYSE Euronext is “very closely monitoring” the African investment climate, Jekel said. “I do not mean that in a passive way. We are very involved in initiatives in highlighting investment in Africa.”
One such initiative, he said, is its annual Ai Index Series Summit held in conjunction with Africa-investor.com (Ai www.africa-investor.com). The 2 companies recently hosted their third annual summit, which featured Robert Rubin, former U.S. treasury secretary and a member of the Africa Progress Panel, and Tony Blair, the former British prime minister, who addressed the summit via a video message.
On African stock exchanges, Jekel said, NYSE Euronext enjoys its closest ties with its client-partner exchanges in Casablanca, Tunis and Gabon, but has close ties with exchanges in South Africa, Egypt and others. There are some 29 functioning stock exchanges across the continent, with Egypt, Nigeria and South Africa accounting for 75% of Africa’s listings.
Jekel said: “We are a technology partner to the Casablanca Stock Market and to the … Bourse Régionale des Valeurs Mobilières d’Africque Centrale, or BVMAC, in Gabon and the Tunis Stock Market. By providing technology to these partners, these stock exchanges are using the same engine that NYSE/Euronext use.” He added that they share much of the insight and institutional knowledge as well.
Jekel said he soon plans to travel to South Africa for meetings with members of that country’s exchange to, as he put it, “grow our list of African issuers” and continue building momentum in the Africa investment area.
NYSE Euronext offers training for sister exchanges in Africa and worldwide “mini-internships,” he said, where visitors from other exchanges can “job-shadow” NYSE Euronext personnel.
Role of stock markets
Jekel pointed out the critical role of stock markets worldwide: “No matter where you are, developed or emerging markets, stock exchanges are where investors meet ideas — where companies come to raise capital to finance their business ideas, to finance their growth, and where investors come to participate in these success stories.”
Stock markets, he said, are also an important vehicle for bringing direct foreign investment into a country and serve as a vehicle that “allows investors to participate in the various growth opportunities that exist in emerging market nations and Africa in particular.”
Jekel stressed 2 key pillars of any functioning stock market: reliability and transparency. “I think those are some of the core principles and pillars of a stock exchange operation, and we see those philosophies being naturally adopted in Africa, so that is very comforting.”
Additionally, he said, “We see business and democracy going forward hand-in-hand in positive momentum” across Africa.
Jekel said industry experts who cover Africa on a daily basis all agree that there is a “strong and growing focus on Africa and that it will only grow from here. We see that due to the entrepreneurial spirit, the success stories that come out of Africa and the growing liquidity in its stock markets. We believe those are highly encouraging indicators of development and what is to come.” Entrepreneurs “are key everywhere, be it in the U.S. or Africa. They are the job engines. That is typically where job creation and wealth is coming from and starting.”
Looking to the future, Jekel said, “I think there is consensus among those who are following Africa that right now the BRIC countries [Brazil, Russia, India, China] have a very large role to play in world markets, but several industry insiders are pointing to Africa as a region and continent to pay close attention to over the next 10 to 20 years.”
October 7th, 2010 by Tom Minney
Renaissance Capital (www.rencap.com), the Russian emerging-markets bank with operations in Africa, plans to expand next year into Egypt and at least 3 other African countries, according to a 5 October interview published on Bloomberg. Rencap says on its website that its core businesses areas are Mergers & Acquisitions, equity and debt capital markets, securities sales and trading, research, and derivatives. It says it is building “market-leading practices across emerging markets globally in metals & mining, oil & gas and agriculture.”.
Clifford Sacks, CEO of the South African unit and head of Pan-African Equities, told Bloomberg from Johannesburg the bank may buy or start a brokerage in Egypt that would also cover Morocco and Tunisia. Hasnen Varawalla, global head of corporate finance, added that it also plans to move into Angola, Uganda and Rwanda. Rencap is bsed in Moscow, and currently operates in African nations including Ghana, Kenya, Nigeria, South Africa Zambia and Zimbabwe. Bloomberg quotes Varawalla: “Each of these countries will see a huge development in their capital markets. We are looking to expand into another 5 or 6 countries in Africa.”
The bank is half-owned by billionaire Mikhail Prokhorov. It started its African business in 2007. According to Bloomberg last year it participated in 24 transactions across 13 African countries, including the $955 million sale of Central African Mining & Exploration Co. to Eurasian Natural Resources Corp. Africa accounts for a quarter of RenCap’s investment-banking business. Varawalla told Bloomberg that Non-Russian activities will generate more than 50% of revenue within 2 to 3 years.
In July, it paid ZAR207 million (then US$27.3 million) to acquire BJM Securities, the brokerage business of South Africa’s Barnard Jacobs Mellet (BJM) Group. A press release by Rencap describes BJM: “Founded in 1985, BJM Securities is the leading independent full service broker-dealer in South Africa. The firm is known for its outstanding research franchise, having been ranked No.1 in South African research surveys.
The Firm entered South Africa in February 2010 and appointed Clifford Sacks. The press release quotes him: “The combination of a leading independent brokerage in South Africa with award-winning research franchise and Renaissance Capital’s unparalleled expertise in capital markets and M&A, complemented by our unique access to global emerging markets creates a powerful platform across research, sales and trading in Africa’s largest economy.”