Tunisia's GDP per capita as of 2011 is USD 9,500, a substantially lower amount compared to its neighboring oil-rich economies. Affected by the Arab Spring, Tunisia logged zero growth in GDP in 2011 compared to an annual average of 3.1% during the previous two years.
In terms of market performance, the Tunisia Stock Exchange has bounced back from the low performance figures recorded last year as a result of the Arab Spring. The exchange registered a vibrant and positive performance of 9.96% for the period Q1 2011 - Q1 2012. Notably the upward trend of the index is not merely a market correction; it is a reflection of the strong fundamentals that the country is built upon. Undervalued stocks are now picking up the pace and rallying towards the pre-revolution levels.
Mutual funds focusing on Tunisia are of a mixed nature. As of Q1 2012, the dominant asset type of the Tunisian mutual funds industry is the fixed income asset type; accounting for a staggering 40% out of the total funds focusing on Tunisia. The latter is closely followed by balanced funds and equity funds that make up 31% and 29% out of the total funds industry respectively. Due to heightened volatility in the Tunisian market, fund managers seem to have developed an increasing appetite for fixed income instruments vis--vis the equity capital markets.
Source: Zawya
Aggregate assets under management of Tunisian funds as of December 2011 are USD 3,474 million, a decrease of 2.25% over December 2010's level of USD 3,554 million. The funds industry recorded a net outflow of USD 39.34 million during the first quarter of 2011. This has further improved to an outflow of USD 2.96 million during the second quarter of 2011. The third quarter of the year has witnessed a substantial increase in net inflows into the Tunisian funds industry registering a total of USD 63.67 million.
As regional stock markets have become less appealing to the risk averse investor, fixed income products are attracting the capital that has been shifting within the MENA region as a whole.
2011 witnessed the launch of 12 mutual funds out of which 2 are Islamic. As of Q4 2011, Tunisian domiciled funds stand at 106.
Backed up by a solid annual average fixed coupon rate of 5.88% calculated for the past four years, Tunisian Fixed Income Instruments appear to be an attractive asset to fund managers and investors that diminishes the risk while providing moderate returns in turbulent times.
Although the funds industry in Tunisia is relatively smaller than its neighboring North African industries, on a promising note, Tunisia has quickly shed the ramifications of the Arab Spring that took their toll on the regional stock exchanges.
Nader El Boustany is a senior product analyst in Zawya's financial services division.
Zawya 2012
