Pierre Goudiaby, Chairman of the Board of Directors of the BRVM since June 2015, has become a central figure in the African financial market. He shares with us his wealth of knowledge on the continent’s current stock market as well as what to expect in the future.
Leaders League. In 2015, BRVM was the number one performing African Stock exchange distinguishing itself from other financial centers which have trouble developing. How do you explain this success?
Pierre Goudiaby. Indeed, in 2015, we recorded the best performance in Africa regarding stock index progression (all currencies alike – CFA, euro and American dollar). This historic performancewas due to many positive factors coalescing: the considerable economic growth of the Ivory Coast these last three years – 8% to 9% per year – and consolidation – between 5% and 6% - the growth of other West African Economic and Monetary Union countries; the monetary stability of our Union with the CFA franc and the Euro; or even the power of integration and the fruits of regional and international promotion that we launched in 2013.
2015 was also the year that we achieved three capitalization records: 6 500 billion CFA francs on March 10th, 7 000 billion on July 9th and 7 500 billion on October 15th.
Leaders League. The coming together of the financial centers of the Economic Community of West African States (Ecowas) began in 2013. How is it getting along?
P.G. The West African Capital Markets Integration Council (Wacmic) was created in 2013 by financial market actors in the Ecowas perimeter – regulatory bodies,Stock exchanges, certain Central securities depositories (CSD) and financial market operators under the leadership of the Ecowas.
This counsel has carried out several projects and identified three major phases that should lead to integrating the Ecowas’s exchanges. First, sponsored access, whichstarted between Ghana and Nigeria on July 15th, 2015. This first phase consists of formalizing relations between brokers that can negotiate securities in the marketplace besides their own by way of local brokers. Second, the implementation of a common passport, that will allow qualified brokers to directly intervene on all the exchanges of the Ecowas thanks to a single license. Finally, this integration will be formalized by a single quotation platform symbolized by a sole order book on a regional scale.
Some questions remain to be answered linked to the movement of capital (foreign exchange regulations) and securities, the settlement of transactions in real time (RTGS-Ecowas), and a harmonization of market rules.
Leaders League. Does this mean that the take-off of market capitalization should as a necessity be the work of regional integration?
P.G. Absolutely! African exchanges are too fragmented. We need to group them. For example, if the Ecowas exchanges were to unite, they’d form the number two African exchange after Johannesburg. What’s more, this integration would allow companies and investors access to a larger market that is deeper and more fluid. This would be beneficial for mobilizing resources and enhancing profitability of investments in order to accelerate the development of the continent as a whole.
Leaders League. What are the objectives of the BRVM in the years to come?
P.G. In 2016, we hope to consolidate our position on the African continent and internationally by becoming a full member of the World Federation of Exchanges. We hope to reach a capitalization of 8 000 billion CFA francs this year and sensibly develop the liqiudity of BRVM.
We would also like to increase our market financing of the economies of our countries by admitting new companies that arein good standing, the creation of compartment/desk for SMEs and SMIs, the launch of obligations to the diaspora.
Finally, we hope to continue implementing integration projects forthe Stocks of the Ecowas and develop our relationships with other exchanges such as those in South Africa and Morocco by specific instruments (ETF, dual listing, etc.)