Edoh Kossi Amenounvé, Managing Director of the Abidjan Regional Stock Exchange (BRVM), reaffirmed goals and commitments of BRVM in favour of the financing of West African Economic and Monetary Union (WAEMU) states.
Leaders League. The Regional Stock Exchange (BRVM) is part of the 24 African stock exchanges. What is its role with regards to financing of West African Economic and Monetary Union (WAEMU) states’?
Edoh Kossi Amenounvé. Within the last 20 years, the African stock exchanges have changed dramatically. It went from 14 stock exchanges in 1995 to 24 in 2015, with a market capitalization reaching more than $1.1 trillion. By issuing bond loans, the African states can therefore finance their infrastructure projects. As for the private companies, the stock exchange can allow them to consolidate their capital structures and ensure their growth financing through debt security issues such as bond loans and/or capital accounts on the equity market. In 16 years of activity, CFA Francs 3.89 trillion have been raised on the primary market, among which 83% is in bond loans, that is $3.243 billion – 68% by the states, for their infrastructure projects’ financing and 15% for the private sector.
The BRVM not only is the 6th largest stock exchange in Africa, but it also plays an important role in mobilizing available long-term savings towards productive investments.
Leaders League. We witnessed for a few years already a renewed interest of African companies for private equity, sometimes instead of stock exchange listing. What is the BRVM strategy to attract new companies to listing?
E. K. A. Whenever there is a stock exchange listing, any investor is mostly guided by both profitability and market liquidity. There are two categories of investment funds operating in the WAEMU region: those intervening on the Abidjan stock exchange and those directly investing in privately-held companies. By the end of 2013, the first category represented about 47% of transaction values.
Leaders League. You announced a reconciliation process with other African stocks exchanges within the WAEMU. What is the strategy behind this move?
E. K. A. The WAEMU authorities contemplate, for 2020, the integration of this zone both on the economic and capital market levels. In that perspective, the financial market regulators, the stock exchanges and the central securities depositories have all signed a convention creating the West African Capital Markets Integration Council (WACMIC) in Abuja on January 18, 2013. The WACMIC aims at monitoring the integration of the Economic Community of West African States’ (ECOWAS) financial markets. The coming together of financial markets will certainly contribute to improve the liquidity of financial markets of the zone.
Leaders League. As long-term investment financing, the BRVM also wishes to assist the listing of SME/SMI. What is your plan?
E. K. A. The BRVM indeed contemplates contributing to the long-term financing of SME/SMI. This will be effected by the opening of a third compartment in the equity market. This compartment will also be dedicated to high growth potential firms and will benefit accompanying provisions, including access to two funds. One of them will help preparing the potential issuers within sight of a price quotation and the other one will prefinance all fees related to their listing and their continued listing for a certain amount of time.
A.F.A & E.S.