The Tunisian Financial Market: A Growing Importance in Fund Mobilization
The Tunisian financial market is playing an increasingly important role in mobilizing funds for economic operators. This is particularly true since the launch of the national bond issue and the key contribution of stock exchange intermediaries. Moreover, microfinance institutions have been very active on the market with their corporate bond issues, offering high yields that appeal to risk-averse investors. Open-ended investment companies (OPCVM) have achieved a record net asset value, capable of following this pace of issues while offering a convincing return.
However, a market is supposed to offer high-leverage solutions as well, which does not seem to be the case here. To date, no capital increase in cash has been recorded in nearly six months. The machine is running, but on debt, not equity.
It is evident that the capital structure of most companies is based on a hard core and a floating part that rarely exceeds 40%. Therefore, the success of a recapitalization depends, above all, on the ability of this hard core to ensure the subscription of its part and the remaining shares of minority shareholders. In the current conditions, who would be able to do so, especially for operations involving tens of millions of dinars? The list is very limited, and the result is a complete absence of these operations.
Furthermore, there have been no initial public offerings (IPOs) for a long time, which is understandable. With such high yields and risk premiums, valuations will be penalized, making IPOs unfair for companies. This is especially true for companies whose founding management seeks to cash out.
The interest rate outlook confirms that this dominance of debt securities issues on the primary market will continue for a long time. Ultimately, financial resources are available, but a good equity story is needed to convince savers.