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Tunisia Stocks Drop a Third Day on Protests Against Unemployment

Jan. 12 (Bloomberg) -- Tunisia’s benchmark stock index fell to the lowest level in almost nine months after Al Arabiya reported the government deployed the army in western suburbs of the North African country’s capital to end riots.

The Tunindex declined 3.4 percent to 4,726.75 at the 2:10 p.m. close in the capital Tunis, the lowest level since April 19. That brought the gauge’s three-day loss to 9.4 percent, the most since Bloomberg started tracking the index in 1999. Banque Internationale Arabe de Tunisie, also known as Biat, slumped the most since October 2008 and beverage maker Societe Frigorifique et Brasserie de Tunis SA fell 4.5 percent.

“The selling seems to be coming more from local investors,” Julien Veron, frontier markets analyst at Investec Asset Management Ltd., said by telephone from Cape Town. “Tunisia is a story that we like, and a little shakeup of three days is not going to change our views overnight.” Investec has $1.5 billion in African assets under management, of which about 2 percent is allocated to Tunisia, Veron said.

Protests against the government’s inability to curb unemployment have killed at least 21 people in the past week, according to Communications Minister Samir Labidia. Tunisian President Zine El Abidine Ben Ali pledged Jan. 10 to create 300,000 jobs in two years and cut taxes on companies that employ young people.

The government needs to do more to employ the estimated 30,000 to 40,000 university graduates that enter the job market every year, Veron said.

Tunisia’s Prime Minister Mohamed Ghannouchi today announced the replacement of the country’s interior minister and said his government will form committees to investigate the riots and corruption claims.

Biat retreated 4.7 percent to 70.5 Tunisian dinars and Societe Frigorifique declined to 11.31 dinars, the lowest level in more than a year.

To contact the reporter on this story: Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net.

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net.

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