TUNIS — The Tunis Stock Exchange suspended trading on two consecutive sessions this week after the Tunindex fell more than 3 percent each day, the first time in years that the market's automatic circuit breaker has been triggered twice in a row.

The benchmark index dropped 3.47 percent on Tuesday to close at 19,739.81 points, activating Article 3.7 of the exchange's trading rules, which halts dealing for one hour when the index falls past minus 3 percent and shuts the session entirely at minus 5 percent. Because Tuesday's breach came around 12:10, close to the end of the session, the hour-long pause effectively ended trading for the day. The mechanism fired again on Wednesday on a second decline of more than 3 percent. The market steadied later in the session, according to Web Manager Center.

The Financial Market Council, the CMF, convened an emergency meeting on Wednesday bringing together the finance ministry, the Central Bank of Tunisia and market participants.

Where the fall came from

The context is a rally with few precedents on the Tunis exchange. On 17 July the Tunindex touched an all-time high of 21,552.73 points, up roughly 60 percent since the start of the year and about 83 percent over twelve months, according to the brokerage MAC SA. A wave of profit-taking at those levels was, in the firm's words, not merely probable but expected. The slide had been building: a 3.27 percent drop the previous week, then a 1.9 percent fall on Monday led by banking stocks.

The trigger cited by analysts was regulatory. Decree No. 148 of 2026, which frames the new zero-interest "honour loans" in the wake of the cheque reform, landed on a market whose heaviest weights are banks — the shares most exposed to any rule that touches their cost of risk or their profitability. Tunisie Valeurs noted that the direction of travel had been foreseeable since the 2024 law; the market reacted with nervousness anyway.

What the episode revealed

Brokers were near-unanimous that the machinery worked as designed. MAC SA pointed to sustained liquidity throughout the fall — more than 11 million dinars traded on Tuesday, 9.6 million on Monday, after a week above 70.5 million — as evidence of an orderly correction rather than a rout, and to fundamentals that have not deteriorated: aggregate revenues up 4.64 percent, net banking income up 4.9 percent, and an average market price-to-earnings ratio of 14.5 times against 19.3 times in Casablanca.

The uncomfortable finding is structural. Tunisian equities are dominated by retail investors, with too little local institutional money to absorb selling under stress. Without those "strong hands," Web Manager Center noted, herd behaviour amplifies every move — which is how a predictable correction becomes two circuit breakers.

What would change it

The remedies market professionals point to are unglamorous and slow. Regulatory predictability comes first: publishing the impact assessment of a decree such as No. 148 before it reaches the market, and disclosing enough about the origin of selling flows that investors are not left guessing. Depth comes second — a larger domestic institutional base, insurers and pension money able to buy when retail sells.

The consensus among brokerage houses is that the broad rise is over and a phase of selective picking has begun. Whether that phase is orderly will depend on the half-year results still to be confirmed, and on how much of the past six months' 60 percent was earnings and how much was momentum.