In July, the Tunis Stock Exchange advanced by 0.88%. But behind this index movement lies a more interesting development: the number of shares traded rose by 13.38%, to 32.10 million, while the value of transactions fell by 3.66%, to 184.79 million dollars. In other words, more shares changed hands, but for a lower overall amount.
The same misalignment appears at the regional level, though not uniformly across all markets. In July, the total value of transactions on the markets studied by the Arab Monetary Fund declined by 16.82%, from 108.48 to 90.24 billion dollars.
At the same time, the number of shares traded rose by 28.82%, to 261.86 billion shares. Behind these aggregates, national situations are nonetheless very contrasted.
This contrast raises a question particularly useful for a company or an investor: does a large market capitalization necessarily mean that activity there is proportionally more intense?
The essentials
Tunindex in July: +0.88%
Shares traded in Tunis: +13.38%, to 32.10 million
Value of transactions in Tunis: -3.66%, to 184.79 million dollars
Arab markets: value of transactions -16.82%, but number of shares traded +28.82%
TN ratio: Tunis stands at 1.11% in July, ranking 5th among the 15 markets compared according to this indicator.
Measuring intensity, not just size
To compare markets whose size ranges from a few billions to more than 2.5 trillion dollars, the editors calculated a simple indicator:
July transaction value / end-July market capitalization.
We will call it in this dossier the “monthly turnover ratio”. It is a TN calculation, and not an indicator published by the Arab Monetary Fund.
This ratio allows roughly to measure the intensity of the month’s trading relative to the market’s size.
Two precautions are essential.
First, the ratio is not annualized: it should not be compared directly with annual turnover rates published by certain exchanges or financial organizations.
Second, it does not constitute a complete measure of liquidity. It does not account for the actually available float, nor the depth of the order book, nor the spreads between buyer and seller prices, nor the concentration of trading on a few values or block operations.
A low ratio is therefore not necessarily negative. It can notably accompany stable ownership, a small float, or a strong presence of long-term investors.
The objective is not to establish a ranking of the “best” stock exchanges, but to compare the financial intensity of trading relative to their size.
How to read the TN ratio?
Calculation: July transaction value ÷ end-July market capitalization.
What it measures: the monthly intensity of trading relative to the market’s size.
What it does not measure: the complete liquidity of a market. It does not take into account the float, the depth of the order book, spreads, or the concentration of transactions.
