Good news continues to emanate from Tunisia, a frontier economy that from an economic convergence standpoint (i.e., the tendency of a variety of contrasting per capita income growth rates to ultimately normalize) has benefited as much, if not more so, from the 1995 Euro-Mediterranean partnership than any other member state. Silk Invest noted to investors last week, for instance, that according to the annual report of the World Economic Forum on Global Competitiveness (2009-2010), Tunisia ranked at the top of the African countries and 40th in the world (out of a total of 133 surveyed countries). Moreover, on Wednesday Tunisia and European Union (EU) officials signed a protocol establishing a mechanism for resolving commercial disputes–“aims to offer more guarantees to foreign investors and economic operators in Tunisia, which is likely to strengthen the competitiveness of the Tunisian economy and bolster confidence in its investment environment,” per news reports. Finally, FDI increased by 9.5% in 2009–helping underpin the expected 3.5% growth rate the country is expected to announce for the year. IMF Deputy Managing-Director Murilo Portugal has praised the country for managing to bring down its public and doubtful debts, and increase its currency reserves FDI volume in the face of credit contraction worldwide. Tunisia, Portugal said, is “reaping the fruits” of its ongoing economic liberalization and reform policy that he said has full IMF support.
One Tunisian company in particular to keep tabs on is Société Tunisienne d’Assurances et de Réassurances (Tunis Re), a publicly-traded insurance and reinsurance firm that markets a range of life and non-life policies for individual and corporate clients. Per A.M. Best, a credit-rating agency:
“Overall earnings are expected to remain consistently stable and positively impacted by likely stable investment returns, while the investment portfolio gradually increases exposure to shareholdings in 2010 and 2011 to take advantage of the anticipated markets recovery, translating into an expected return on equity in the range of 10 per cent over the next three years.”
From a technical standpoint the stock may be in the closing stages of a cup and handle at the moment–it trades at 145TND–though a break below 140-142 would breach a resistance line dating back to June. Volume has really tapered off, however, on a stock whose YTD chart has been quite exuberant.