January Effect on the Stock Market
The January effect is a phenomenon where stock prices, particularly those of small capitalizations, exhibit a marked upward trend in the first month of the year. This can be mainly explained by tax-related reasons. In December, investors often sell securities, even at a loss, to reduce their taxable base, which puts downward pressure on prices. As soon as January arrives, these same assets are repurchased, while new liquidity is reinvested, causing a technical rebound. The effect is also reinforced by a psychological feeling of new beginnings, which encourages risk-taking at the start of the year.
Absence of the January Effect on the Tunisian Stock Market
In recent years, this phenomenon has not been observed on the Tunisian stock market. This is a sign that the market is becoming increasingly mature and anticipated by many actors who arbitrate this seasonality by taking positions as early as December.
First Trading Session of the Year
The first trading session of the year, which saw the Tunindex decline, is not a reference point. It bears the mark of a decline in certain heavyweights of the financial industry, reflecting the impact of the decrease in the Direct Rate. However, fundamentally, nothing has changed between December 31, 2025, and January 2, 2026, and everyone expected such a decision from the Central Bank. The overall trend will be dictated by the activity indicators of the last quarter, which will be published during the second half of the month. Banks, in particular, will be closely watched, as their performance will be decisive for the entire market.
Key Points to Watch
- The January effect and its impact on stock prices
- The maturity of the Tunisian stock market
- The influence of tax-related reasons on investment decisions
- The performance of banks and their impact on the overall market trend
- The publication of activity indicators for the last quarter and their potential impact on the market.
