Bond Market Sees 55.1% Decline in Trading Volume
Since the beginning of the year, the trading volume on the bond market has reached 67,321 MTND, a 55.1% decrease compared to 2023. This decline can be partly explained by the high interest rates, which make it difficult for bonds to be released. Additionally, the pace of issuances on the primary market and the strong collection by collective management organizations (OPCVM) allow for longer-term holding of debt securities and the accumulation of their revenue.
Buyers and Sellers
On the buying side, collective management organizations (OPCVM) accounted for 61.2% of the total volume, or 41,170 MTND. Individual investors came in second with 36.8% (24,784 MTND), followed by managed accounts (0,842 MTND) and proprietary accounts (0,522 MTND). The same trend is observed on the selling side, with OPCVM accounting for 49,567 MTND, individual investors for 11,293 MTND, and managed accounts for 5,609 MTND. Foreign investors' contribution remains low.
Market Activity
In total, 1,138,440 securities were traded. The majority of the volume concerned corporate bonds, with 53,102 MTND, or 78.9% of the total volume. Transactions on government securities totaled 14,218 MTND.
Outlook
We believe that the dynamics of this segment of the Tunis Stock Exchange will experience growth for two main reasons.
Firstly, the application of IFRS standards by credit institutions and financial companies will lead to the accounting of bonds and treasury bills at their fair values, encouraging transactions on different lines.
Secondly, the eventual decrease in interest rates will make high-yield bonds more attractive, increasing their demand. These bonds will be the first to be liquidated if there are redemption requests or opportunities to invest elsewhere.
In any case, the secondary market must show more depth, as it is the true driving force behind the expanding primary market.
