African bourse on charm offensive
The Bourse Régionale des Valeurs Mobilières, a West African regional stock exchange, is on a charm offensive, holding its first investor road show in SA this week, positioning itself as a blueprint for regional integration amid a project to link stock exchanges on the continent.
The Bourse Régionale des Valeurs Mobilières (BRVM), a West African regional stock exchange, is on a charm offensive, holding its first investor roadshow in SA this week, positioning itself as a blueprint for regional integration amid a project to link stock exchanges on the continent.
South African investors held about 3%-4% of shares in companies listed on the BRVM, the most of any African country outside of the eight countries that shared the exchange, CEO Edoh Kossi Amenounve said in Johannesburg on Wednesday.
The stock exchange is shared by Benin, Burkina Faso, Guinea Bissau, Mali, Niger, Senegal, Togo and Ivory Coast, where it is headquartered.
BRVM is the sixth-largest securities exchange by market capitalisation on the continent, with a value of $17.7bn at the end of December, a fraction of the JSE’s R15-trillion.
Stock exchanges across the continent are multiples smaller than their South African counterpart, but this could change if integration improves. The BRVM was working with capital markets in countries such as Nigeria and Ghana to improve the ease with which brokers could trade across exchanges in West Africa, said Amenounve.
“Liquidity is a big challenge for all African exchanges, except the JSE,” he said.
The total value of equity traded on BRVM in 2017 was $424m, which is about a quarter of the JSE’s monthly trade.
To tackle this, BRVM was trying to increase the free float in the shares of companies trading on its exchange, currently set at a minimum of 20%. It was also seeking to attract more retail investors, Amenounve said.
Many foreign funds could only buy stocks that met minimum average daily liquidity levels, said Michael Barnes, head of sales and trading at stockbroker African Alliance.
While BRVM had 45 listed firms, Senegalese telecoms company Sonatel accounted for the bulk of the exchange’s market value, said Simon Reid, head of Investec Africa Securities, which provides trading services to clients on BRVM.
The African Exchange Linkage Project, launched in partnership with the African Securities Exchanges Association in 2015, sought to better connect exchanges on the continent. The pilot phase would include the BRVM and exchanges in Johannesburg, Nigeria, Casablanca, Nairobi and Mauritius.