How is the BRVM driving economic growth in Côte d’Ivoire

The Bourse Régionale des Valeurs Mobilières (BRVM) of UEMOA, which includes Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo, began its activities in 1998 with 35 listed shares. The exchange has since grown considerably – by the end of 2021 it had 46 securities, 35 of which were issued by Ivorian companies; and 123 bond lines, 94 of which were listed on the bond market and 29 unlisted.

The BRVM has been a top-performing African stock exchange since 2015, when it experienced a 17.7% increase in its composite index. Thanks to the robust evolution of its main indicators over four successive years, in 2016 the BRVM joined the stock exchanges of Nigeria, Morocco, Tunisia, Kenya and Mauritius in the MSCI Frontier Market Index.

However, after these prosperous years, the BRVM fell into the red between 2017 and 2020. It reached its lowest point in 2019, when it fell by 29.1%, before posting a 39.2% recovery in 2021, becoming the second-best-performing African stock exchange.

This performance reflects the dynamism of stock market activity in UEMOA in 2021, notwithstanding the international disruption of economic activity caused by the Covid-19 pandemic and the regional impact of the socio-political crises in Mali and Burkina Faso. The resilience of regional economies in the face of these events can in part be attributed to measures by regional governments to stimulate economic activity and the accommodative monetary policy of the Central Bank of West African States, which has supported businesses and households through measures like cuts in key interest rates and the postponement of the maturity of debts of businesses affected by the pandemic.

Key Figures

The improvement was also felt in terms of transactional flows, with a volume of 248m securities traded on the stock market in 2021, quintupling the amount traded to CFA723bn ($1.2bn), compared with the amount lost in 2019. The shares of Sonatel Sénégal remained the most active in terms of value, with more than CFA49bn ($84m) traded.

The BRVM increased its overall capitalisation to CFA13.3trn ($22.7bn) in 2021, a strong increase (48.6%) compared to the CFA9trn ($15.5bn) recorded at the end of 2019. The equity and bond segments contributed 46% and 54%, respectively.

In terms of variation in the market, the best performance in the equity market was achieved by the shares of Nestlé Côte d’Ivoire, whose price increased by a factor of 14 in one year, rising from CFA320 ($0.55) at the end of 2020 to CFA4605 ($7.92) at the end of 2021. In contrast, the shares of Société Ivoirienne de Câbles exhibited the weakest performance, increasing by 0.5% for the year 2021.

Despite the challenging situation faced by the BRVM in 2020, more than CFA323bn ($555m) was distributed in net dividends this year by 32 of the 46 listed companies, compared to the CFA282bn ($485m) paid by 24 companies in 2019.

Market Developments

The regional market could still experience an upturn in the coming years, considering that the negative factors that pushed it into the red between 2016 and 2020 have already reached their peak, meaning that their impact has been fully integrated into current stock prices. Additionally, the BRVM has engaged in major projects and has innovated constantly to develop its activities and capacities for a number of years. A third market dedicated to small and medium-sized enterprises, which will soon be launched, will make the BRVM more attractive. New features such as online trading, which is already active, and new financial instruments, notably exchange-traded funds, will help reduce market costs and improve accessibility. Lastly, the upcoming launch of project bonds and the creation of a commodities market could provide a better economic outlook and give the BRVM an even brighter future in the short and medium term.