After FTSE Russell had improved in September 2017 the classification of Tunisia on basis of two criteria, it is the case of MSCI to improve in June 2018 its appreciation on two criteria too.
FTSE Russel and MSCI are two international companies providing financial services, supplying indices and analysis tools for aid making- market investment decision. Their classifications and appreciations are scrutinized and followed by the international investors, in particular institutional. They determine the attractivity of a country and its visibility near the international investors. In practice, the inclusion of a country in the FTSE indices or MSCI, which are replicated by the fund managers, reinforces the foreigns flows investments towards this country.
FTSE improved its appreciation of the criterion of efficiency of the mechanism of negotiation which passes from “restricted” to “respected” as from the criterion of liquidity which passes from “not respected” to “restricted”. The passage of this last criterion with “respected” would make the Tunisian market eligible to the higher statute of “Secondary Emerging”. What would more reinforce the attraction of Tunisia near the international investors.
In his last report on accessibility of markets, published in June 2018, MSCI compares the regulation and practices by countries to international standards, and indicates the tracks of improvement likely to be appreciated by the foreign institutional investors.
This report, which reflects the perceptions and the experiences lived by foreign institutional investors, provides a detailed evaluation of the 5 criteria of accessibility to the market :
1.Access of the foreign participation (restrictions on the foreign investment, equal rights for the foreign investors…)
2.Facility of exchange of the entering/outgoing capital (gone of exchanges developed…)
3.Efficiency of the operational framework (accessibility of the foreign investors to the market, infrastructure and market organisation…)
4. Competitiveness (access of investors to the derived stock market information, the data and the products of investment…)
5.Stability of the institutional framework (stability of the economic system of the country…).
MSCI, like FTSE Russell, maintained the Frontier statute of the Tunisian market, mainly because of a capitalization considered to be insufficient, but was based on the coming into effect of the new law of investment 2016-71 to improve its appreciation of two criteria which pass from “Improvement necessary (-/?)” to “Any problem (++)”. These criteria are “Restrictions on the foreign investment” and “Problems related to the limitation of the foreign participation”.
It is to be announced that a working group was created at the start of 2018 under the support of Finance Minister and the collaboration of many official representatives from the Financial Council Market, the Tunisia Central Bank, the Investment Tunisian Authority (foreign promote Agency), Tunisia Clearing Company, Brokerage Association, the Tunisian Banks and Financial institutions Association and the Tunis Stock exchange. This working group has treated the impediments with the respect of quality market criteria required by the providers of international indices, like MSCI, Standard and Poors (S&P) or FTSE Russell, in order to improve the visibility of Tunisia to foreign investors.
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