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News Link • Economy - International

Tunisia: Blood in the streets?

• http://www.sovereignman.com, Simon Black
 

Banking tycoon Baron Rothschild is credited with saying that ‘the time to buy is when there’s blood in the streets.’ Rothschild took his own advice, making a fortune buying deeply undervalued assets following Napoleon’s defeat at the Battle of Waterloo.

Tunisia’s uprising was some 18-months ago, so it hardly qualifies as blood in the streets today. To give you an example, the local stock market (Bourse de Tunis) has recovered from its post-revolution lows, and the TuniIndex is up 17.6% in the last 12-months.

Despite the runup, though, share valuations are not astronomical by any objective measurement; some of the Bourse’s largest companies are valued at less than 10x earnings. With few exceptions, though, dividend yields are 2% to 4%.

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