Police cordon off an area near the site of an explosion in the centre of the Tunisian capital Tunis, Tunisia October 29, 2018. Reuters
Police cordon off an area near the site of an explosion in the centre of the Tunisian capital Tunis, Tunisia October 29, 2018. Reuters

Tunisia faces ‘alarming’ security situation after successive terror attacks



Anis Matri, relaxes behind the bar at the Tunis' club, a dusty photograph of Che Guevara balanced on the shelf behind him. It's still early, though the bar's regular patrons are beginning to file in and fill the air with smoke. “I don’t think things are any safer now than they were a few years ago," he says. “They’re still there. They’re still on the border with Libya, with Algeria. Nothing’s really changed.”

From the October suicide bombing in central Tunis, to an ISIS-claimed attack on a security patrol last week at Kasserine, close to the Algerian border, the threat of terrorism lingers over Tunisia, despite the forces of the security apparatus arrayed against them.

On Friday, the Ministry of Interior announced that it had arrested 12 suspected members of ISIS and seized a large quantity of bomb making materials. Few details were given on how these may have been connected to either the attack in Tunis or the assault in Kasserine.

Over recent years, Tunisia's link to extremism has been established for many, with the savage 2015 attacks at the capital's Bardo Museum and the resort town of Sousse sealing the association. Some 2,900 Tunisians are now thought to have left their homes in Tunisia to fight in Iraq and Syria, making the country one of the highest exporters of foreign fighters in the world.

According to the Rescue Association for Tunisians Trapped Abroad, the organisation liaising between the families of Tunisia's foreign fighters and the authorities, 970 fighters have since returned.

Analysts caution against exaggerating the significance of the threat posed by the latest spate of attacks. “I would not call it an sharp rise,’ said Ludovico Carlino, a senior Middle East and North Africa analyst with IHS Markit, an information and analysis firm. “But it’s true that there are alarming signals from a security perspective.

"This is the second jihadist attack in just a month; the Tunisian police has carried out some relevant operations dismantling terrorist cells and Tunisia is again mentioned in the jihadist propaganda, such as in the latest edition of the ISIS newsletter Al Naba in which the group criticised the decision by the government to approve the law stipulating that women had the same rights as men in inheritance cases."

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However, the scale of Tunisia's local militant movement is easily overstated.  Last week's attack on a security patrol served to both underscore the limited nature of the group's resources, as well as its unwavering commitment to violence.

According to witnesses, militants approached the security patrol on motorcycles before opening fire with automatic weapons, injuring a civilian bystander. Likewise, the suicide bombing in central Tunis, though injuring many, killed only the bomber herself, an unemployed graduate from the coastal town of Mahdia. According to Tunisia's interior minister, the bomber had pledged allegiance to ISIS. The group has yet to claim the attack , a potential indication of its perceived failure.

Harried by the state’s aggressive security measures, with their freedom to operate dwindling, Tunisia’s terrorist fighters are finding themselves in bitter competition with each other for both resources and recruits.

“What it’s interesting is that the latest ISIS attack in Tunisia took place in Kasserine, an area not distant from Jebel Chambi, the traditional stronghold of, Katiba Okba Ibn Nafaa," Mr Carlino said, referring to the Al Qaeda in the Maghreb-linked militant group also known by its acronym KOIN.

“It might be that some KOIN militants have defected and embraced the Islamic State banner, although it’s worth stressing that that area of Tunisia has been quite prone to jihadist activity for a while now.”

There are also indications that the supply lines between Tunisia and Libya, considered to be the staging grounds for both 2015 attacks, are succumbing to the pressure of the state and the security services. But the shrinking numbers passing across the border could equally be a consequence of shifting priorities for ISIS.

“The group is trying to re-organise its ranks there,” Mr Carlino said, “and attempting to attract militants inside Libyan territory instead of facilitating their transfer into Tunisia.”

Though recent attacks on the security services may have been limited in scope, their lethal potential cannot be overlooked.

In July, an attack by KOIN fighters on the security services in Tunisia's northwest killed six people. By all accounts, the attack lasted only moments.

"It was a treacherous ambush," Omar Benaissi, an official from the local area told The Washington Post. Using a home-made bomb and old Kalashnikovs, "the six were killed in the moment the attack happened".

For Anis, so much of this has become background noise. He came to Tunis from Jendouba on the Algerian border some yeas ago. He has already lived much of the theory others talk about. He cleans an ashtray, adding to the towering stack forming by the sink. "Police are good, but when these people start talking about religion and what they think it means, it's people. It's the people we need to beat this, not the police."

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How Tesla’s price correction has hit fund managers

Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.

It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.

The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.

Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.

Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.

He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.

AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”

A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.

Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.

Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.

Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.

By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.

Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.

In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”

Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.

She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.

Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.

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