West Africa’s regional stock market, which switched to real-time trading this week to lure more foreign investors, may see as many as nine new companies selling shares on the exchange next year.
That will probably include three from Ivory Coast and three from Senegal, Gabriel Fal, president of the stock market’s board of governors, said in an interview Sept. 17 in Abidjan, the Ivorian commercial capital where the bourse is based. Niger, Burkina Faso and Mali may each have a listing, he said, declining to name any of the companies. The last initial public offering was Bank of Africa Burkina Faso, in December 2010.
The “mentality is changing,” said Fal, who’s based in Dakar, Senegal. “Companies are becoming more favorable” to the idea of trading their shares on the market, he said.
Stock markets in Ghana, Kenya, Zambia and Nigeria are among the world’s 15 best performers this year, rallying as the International Monetary Fund said Africa’s growth, at 5.1 percent, will be the best in the world in 2013 after developing Asia. The BRVM’s Composite Index advanced 21 percent, beating a 13 percent increase in the FTSE/JSE Africa All-Share Index in Johannesburg. The gauge dropped 0.9 percent to 200.34 by 1:15 p.m. in Abidjan.
The companies that may list mostly operate in banking and insurance, as well as in the telecommunications and commodities industries, Fal said. A share sale by Bamako-based telecom Sotelma, planned for mid-2012, was delayed after a coup in Mali that year.
Senegal’s Sonatel, which offers mobile-phone services in four West African countries and is 42-percent owned by France Telecom SA, is the biggest company on the BRVM by capitalization. Its shares gained 24 percent this year and traded unchanged at 18,000 CFA francs.
Most of the 37 companies on the exchange are Ivorian, which has the biggest economy in the eight-member West African Economic and Monetary Union. The best performer this year is Abidjan-based Uniwax SA, a fabric printer owned by London-based private-equity company Actis LLP. The stock has risen almost fivefold this year.
Trading volumes on the exchange have increased to 43.7 million this year, compared with 36.4 million for all of 2012, according to data compiled by Bloomberg. The index has a market capitalization of 4.44 trillion CFA francs ($9.1 billion), the data show.
The exchange switched to real-time trading on Sept. 16 and extended its opening hours to 9 a.m. to 3 p.m. from a two-hour trading day that ended at 10:30 a.m.
“Real-time trading is a necessary step” because some international funds are only allowed to invest into real-time market, Fal said. The longer hours will enable foreign buyers in different time zones to invest more easily.
The West African bourse may start a market for mining companies operating in the region in three to four years, Fal said. It would allow companies that have mining permits to look for funds or partners to develop their operations, he said.
The exchange may develop the use of Global Depository Receipt certificates, negotiable documents held in the bank of one country representing a specific number of shares of a stock traded on an exchange in another country, he said. They may also seek to have its products certified by the French regulator, Autorite des Marches Financieres, he said.
“We aim to be a response to the current need of diversification from foreign investors who seek opportunities in emerging markets,” Fal said.