Interview: Bilel Sahnoun
What could the BVMT do to strengthen its position on the international stage?
BILEL SAHNOUN: Although in line with international standards, the BVMT needs to be modernised in order to be up to date with the overall Tunisian financial sector. A reform project is currently being launched with the support of the European Bank for Reconstruction and Development, the results of which should start to be seen by the end of 2019. The project targets three key areas: broadening the base of investors and issuers; launching new financial products and instruments; and the establishment of an investment services provider.
The BVMT also has a number of bilateral and multilateral relations with other markets. Since June 2018 we have been a member of the World Federation Exchange and we have bilateral partnerships with several stock markets in order to exchange best practices. Each exchange has its own specialism, and Tunisia is well placed to specialise in IT and the management of trading, monitoring or back office platforms. We have a lot of knowledge in this area, and we can position ourselves as the regional IT centre for the financial industry. The BVMT is the first exchange in the region to be ISO 27001 certified. This highlights our high level of IT security and should strengthen our future international standing.
In what ways are measures being set to encourage more companies to enter the market?
SAHNOUN: Public companies suffer from a lack of equity, productivity and profitability, and entering the stock market can be a solution to these problems. In addition, it offers an opportunity to broaden capitalisation and to gain exposure to international investors. In addition, public companies will give the stock market size, depth and liquidity to accommodate larger investment funds. Some 40% of Tunisia’s GDP is not represented in the stock market, which represents a great deal of untapped potential. Growing sectors such as agriculture, ICT, tourism, energy and mining need to be included in the stock exchange in order to broaden the opportunities for international partnerships.
In terms of the alternative market, only 13 companies have been introduced since its creation in 2007, which does not reflect its potential. We currently have an ongoing project to redefine the alternative market and facilitate its access. Our current reform is focused on dedicating the alternative market to qualified investors only with real growth potential. To ensure this level of quality, all companies have to meet rigorous criteria and prove their experience. The market is expected to be boosted by a programme the BVMT is launching with assistance from the African Development Bank and the UK Department for International Development. The programme, known as Investia PME, will offer coaching and support for 120 small and medium-sized enterprises from 2019 until 2021.
Which products will be introduced to the BVMT to attract new categories of investors?
SAHNOUN: The advantage of exchange-traded funds (ETFs) is that they target investors who have a different risk assessment. ETFs can target a category of investor who trusts an index over a share. Two types of ETFs are set be launched soon – one for companies with the highest liquidity, and are part of the Tunindex 20, and another for the banking sector.
In terms of Islamic financial products, we now have the legal arsenal to issue sukuk (Islamic bonds). In 2019 the first corporate sukuk issuance will be released, with a bank launching the sukuk programme. The BVMT will be watching this very closely to ensure it is a success as well as in the hope that we can replicate it in future with other transmitters. We proposed to the regulator to create the sukuk subfund for the secondary market so that these bonds could be more widely traded to investors. We are also working with the Islamic Development Bank to help Tunisia issue sovereign sukuk, which will be introduced to the secondary market in the future.
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