West African Stock-Market Trading Value Halves After Relocation
The value of shares traded on West Africa’s regional stock market more than halved after the exchange was forced to relocate from Ivory Coast because of a political crisis, the head of the bourse said.
Trading restarted on March 1 after being suspended on Feb. 11 to allow the Bourse Regionale des Valeurs Mobilieres, or BRVM, to move its offices to Bamako, the capital of neighboring Mali. Transactions worth 86 million CFA francs ($182,342) were conducted yesterday, compared with a daily average of 200 million to 500 million CFA francs last year, BRVM head Jean-Paul Gillet said.
“We managed to restart the operations of the bourse after we reconstructed the system and the environment,” Gillet said in a phone interview from Bamako. “The volume of transactions has been a bit affected, but the prices haven’t dropped as there has been no haste in selling.”
BRVM’s former offices in Abidjan, Ivory Coast’s commercial capital, were seized on Feb. 9 by security forces loyal to Lauren Gbagbo, the nation’s incumbent leader who says he won a Nov. 28 presidential election. International bodies including the African Union say his rival, Alassane Ouattara, won the vote and is the legal president of the country. The dispute sparked violence that left almost 400 people dead and pushed the country to the brink of civil war, according to the United Nations.
Financial Crunch
The political crisis deepened in February into a financial crunch after at least 10 commercial banks closed their offices amid escalating violence. No Ivory Coast traders have participated in trading since the reopening because most of them work with intermediary companies associated with banks that shut down, Gillet said.
“Given the situation in the country, Ivorian companies face difficulties in taking part in trading, so we mostly have international clients at the moment,” Gillet said. “Companies can’t work from Abidjan because members of their staff are missing or their offices are closed.”
The BRVM has a market value of 3.5 trillion CFA francs, according to Johannesburg-based Securities Africa. France Telecom SA’s Senegalese unit, Sonatel (SNTS), is the biggest company on the bourse by market value, worth 1.65 trillion CFA francs. Eight banks, including Societe Generale SA’s Abidjan-based SGBCI unit and Ecobank Transnational Inc. are listed.
Companies from francophone West African nations and Guinea- Bissau, where Portuguese is spoken, trade their shares on the BRVM. Ivorian companies dominate the market, accounting for 33 of the 39 listings, according to the bourse’s website.
The BRVM’s Composite Index reached 174.89 on Jan. 11, the highest this year. The guage has dropped 7.5 percent since then.
To contact the reporter on this story: Olivier Monnier in Abidjan via Accra at ebowers1@bloomberg.net.
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.
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