IVORY COAST: West Africa's regional bourse shines, thanks to peace moves, burgeoning economies and increased interest in African markets

Record ID: 181888

  • Title: IVORY COAST: West Africa's regional bourse shines, thanks to peace moves, burgeoning economies and increased interest in African markets
  • Date: 25th September 2007
  • Summary: STREET WITH ECOBANK BUILDING SIGN ECOBANK BUILDING
  • Embargoed: 10th October 2007 13:00
  • Keywords:
  • Topics: Economic News,Domestic Politics
  • Reuters ID: LVA4G8ZNSCSKWRKI3B6E4TKRC4IP
  • Story Text: Positive signs of peace in Ivory Coast, quickening west African economies and an emerging interest in African stocks from South African and overseas investors have helped drive up stock prices on Ivory Coast's regional West African bourse this year.
    Often overlooked because the country has been gripped by civil war since 1999, west Africa's regional stock market is making waves again.
    Based in Abidjan, Ivory Coast, is the Bourse Regionale des Valeurs Mobilieres, also referred to as the West Africa Bourse. The bourse has 38 companies from across French-speaking west Africa or UEMOA (West African Economic and Monetary Union) listed on its main index, the BRVM Composite.
    The BRVM Composite index has had a stellar year, rising from around 110 points at the start of the year to almost 200 points at the start of September.
    The rise, seen against sudden spikes and falls in the past, is this time seen as sustainable, with the market clawing back ground lost when Ivory Coast's civil war began in 1999 and investors - and thousands of French nationals - fled the country.
    With the onset of war, the market dropped from over 400 to just 90 points.
    In an interview with Reuters, the director of the bourse, Jean Paul Gillet, explained the factors behind the rise.
    "There are various factors that contributed to the globally improved performance of the market, factors regarding raw materials, which helped improve the profitability of enterprises in the agriculture sector, and the sector that processes agricultural goods, whether it's the palm oil or rubber, the l'Hevea rubber tree; but equally the restructuring of enterprises, particularly in the banking and telecoms sector," he said.
    The West Africa Bourse was for years extremely illiquid and viewed as a market for long term investors like local pension funds and insiders. That has changed, says Gillet, with local peace initiatives in Ivory Coast spurring outside interest and the arrival of more overseas and African investors, including South African institutional investors.
    "With the improvement in the general climate, the end of the crisis, which began to happen in 2005, 2006, and is even more so this year, we are, for example, up to 60 billion (CFA francs) in transactions which are from foreign investors outside the area. And by foreign to the area, I don't mean necessarily the Europeans or Anglo-Saxons, there are also South African funds, and other African funds,'' Gillet explained.
    Unlike Kenya, where the local bourse has seen a huge inflow of funds form individual Kenyans keen to make money on the Nairobi Stock Exchange, Abidjan's bourse remains out of reach for most Ivorians. But with increasing liquidity and a boost in the local economy if peace moves remain on track, that may change.
    Some analysts point to a successful series of bond issues, including a 225 billion CFA bond issue - the biggest ever in Ivory Coast - this year, as an indication of the general return of confidence.
    Peace in Ivory Coast, however, clearly remains the essential ingredient.
    "We are very confident about the future, but of course everything depends on the political and social environment," Gillet said.
    According to figures on the BVRM website, the latest closing prices reflect recent slippage from highs earlier in September.
    On Monday, the BRVM Composite Index lost ground, dropping 0.2 percent from 193.06 to 192.67 points.
    The value of transactions in the market was quoted as 46.81 million CFA francs, with trading involving 17 of the 38 companies listed. The number of securities traded was quoted as 7,779 with 12 of the 20 accredited brokerage firms, including five from outside Côte d'Ivoire, taking part.
    As of last week, according to BRVM, the market capitalisation was 3,311,896,792,330 CFA francs, or more than seven billion US dollars.
    1 US dollar = 464 CFA
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