Tunis Stock Exchange Dominated by Individual Investors

Individual investors dominate the Tunis Stock Exchange, accounting for 70.7% of the volume outside block transactions. These investors are logically influenced by the strategies of institutional investors, who follow more rational strategies and are less sensitive to current events. Among this class of investors are asset managers, such as SPDIT-Sicaf.

SPDIT-Sicaf's Strategy for 2024

In its annual report presented at its latest Ordinary General Assembly, SPDIT-Sicaf outlined its strategy for 2024 and its expectations for the current stock market exercise. Historically, SPDIT-Sicaf has followed a prudent policy, which has enabled it to achieve recurrent profit growth. However, this growth "may hide the lack of visibility and confidence in the economic and financial domain."

Economic Situation and Banking Sector

The economic situation in Tunisia is not flourishing, and the country's economic situation is no secret. This requires an additional dose of prudence. Specifically, concerning banks, the direct financing of the Treasury by the Central Bank may negatively impact the future results of banks, which have been replenishing the State's coffers by regularly subscribing to high-yield Treasury bonds. Losing this source of income, "their results for 2024 will inevitably decrease, and we estimate that this decrease will be around 20%."

SPDIT-Sicaf's Skepticism and Strategy

SPDIT-Sicaf is therefore skeptical about the prospects of a sector that represents the primary determinant of the Tunis Stock Exchange's trend. The asset manager has not hidden its intention to reduce its engagements in banking stocks, a continuation of its interventions in the market since the last quarter of 2023. Moreover, in the first quarter, the capital gains from the sale of listed shares amounted to 5,300 Mtnd, compared to 0.158 Mtnd during the same period the previous year.

SPDIT-Sicaf's Holdings and Outlook

Recall that the SFBT subsidiary holds stakes in ATB, BIAT, Banque de Tunisie, BH Bank, Attijari Bank, BNA Bank, and STB. These positions cost 10,694 Mtnd at the end of 2023, but present a reservoir of latent capital gains of 30,186 Mtnd as of the same date.

Outlook and Recommendation

In our opinion, banks will manage to better navigate the situation. Monetary financing has not prevented the Treasury from continuing its operations on the local debt market. The first two operations of the National Bond Issue have allowed for record amounts to be raised, and the year's objective is almost achieved halfway through. Even if the results are achieved, the effect will be single-digit. In any case, we strongly recommend positioning on SPDIT-Sicaf, which could sign one of the best exercises in its history in 2024.