Among Mango Sellers and Shoeshine Men, a Stock Market Blooms

by Olivier Monnier

March 19, 2017, 7:00 PM CDT, Updated on March 20, 2017, 2:22 AM CDT

On Abidjan’s Avenue Joseph Anoma, amid the bustle of shoeshine men, fruit sellers displaying mangoes and bananas in the shade of a tree, and mobile-phone vendors hustling for custom, a stock exchange is showing new life.

The Bourse Regionale des Valeurs Mobilieres, or BRVM -- a regional exchange covering seven Francophone countries and Guinea-Bissau -- occupies a modest office block in the Ivory Coast’s commercial capital, dwarfed by the skyscraper of its next-door neighbor, the African Development Bank. But just six years ago, the BRVM was in limbo, having temporarily relocated to the Malian capital, Bamako, after soldiers armed with AK-47 assault rifles invaded its headquarters amid post-election chaos in the West African nation.

Since its return to Abidjan, the BRVM has grown from one to four floors, including a new trading room and a giant street-facing screen scrolling stock prices. It is in the midst of an unprecedented listings boom, with six successful offerings since late 2014, and another 16 in the works, according to Chief Executive Officer Edoh Kossi Amenounve. And it is introducing ordinary people -- teachers, clerks and government workers -- to investing in capital markets.

When Coris Bank International SA, Burkina Faso’s biggest lender, started a public offering last year, it planned to keep the sale open for two weeks. It had to close the book after five hours as bids swelled to three times the target. In July, Societe Ivoirienne de Banque, a unit of Morocco’s Attijariwafa Bank, received 13,000 bids in one day totaling 55 billion CFA Francs ($91 million), twice what it looked for. In both cases, investors were mostly individuals and for half of them, it was the first time they had ever bought shares.


“Our offices were besieged, it was a near-riot situation,” said Omo-Dele Egue, the director-general of BOA Capital Securities. “We got more than 1,000 people in Abidjan for only one counter. Everyone wanted to buy shares because they were convinced it would close in one day.”

A daily stock-market television show and weekly training seminars organized by the BRVM, which attract up to 60 participants at a time, are helping to stoke interest. The exchange has also partnered with mobile-phone companies including Orange SA and MTN Group Ltd. in four countries to send daily market news to investors via text messages.

The service, called “Infos BRVM,” began two years ago and now has 56,000 subscribers, according to the bourse. For 300 CFA Francs ($0.48) a month, investors receive three texts per day with the latest stock prices. The exchange is setting up a smartphone application that’ll enable users to place orders from their mobiles.

“A change is taking place in the level of financial literacy,” said Youssouf Carius, who heads Pulsar Partners, an investment fund based in Abidjan. “There are many individuals looking for more interesting deals than what the banks are offering at the moment.”

Among small investors getting a taste for stocks is Eric Kouakou, 34, the head buyer for a private hospital in Abidjan. Until his niece introduced him to an investment club, Kouakou thought the equity market was only for the rich.

“I like taking risks, so I immediately made arrangements and threw myself into it,” Kouakou said. In about a year, Kouakou participated in three IPOs, bought shares in eight companies, and built a portfolio of about 2.5 million CFA francs ($4,090).

The BRVM trades securities of 43 companies in eight West African nations, the majority from Ivory Coast, and is heavily weighted toward banks and telecommunications. The bourse’s market capitalization of about $16 billion places it sixth among Africa’s 13 major exchanges, and trading rose to 409 billion CFA francs last year, five times more than 2011.

Still, the value traded for all of last year is less than a 10th of that exchanged in Johannesburg’s main equity market in a single week.

The number of securities trading accounts at BOA Capital Securities has doubled in the past two years to about 10,000, Egue said. Many of the new investors are part of the middle class but the base is wider -- from wealthy individuals to students and shopkeepers investing amounts from as little as 50,000 francs ($81) to 200 million francs ($320,000), he said.

Frontier Index

The inclusion of the benchmark index in the MSCI Frontier Markets Index means foreign investors are starting to take notice, according to Bertrand Llinas, a portfolio manager at Paris-based Lfpi Asset Management SAS. 

Companies trading on the BRVM are operating in some of the fastest growing economies in the world, according to World Economic Forum data. Ivory Coast is leading at an average of 9 percent growth per year since 2012.

“The new economic attractiveness has put the BRVM on the radar of international investors,” said Llinas, whose $6.7 million Frontier Africa fund returned 2.2 percent in the past month, beating nine out of 10 peers. “The BRVM stock exchange is well diversified, allowing investors to get exposure to different sectors of the economy.”

The exchange is seeking to boost its “relatively low” liquidity by encouraging companies to split their shares and agree to float at least 20 percent of their equity, Amenounve said. He and his team have criss-crossed the globe to meet investors from Paris to London, New York and Shanghai in the past three years.

Thirst for Opportunities

If West Africans are thirsty for new investment opportunities, it’s also because -- before the current boom -- there had been no new listings for four years, said Kadi Fadika-Coulibaly, the head of SGI Hudson & Cie, an Abidjan-based brokerage. Some recent IPOs were part of Ivory Coast’s program to sell the stakes it owns in at least 15 state-owned companies. But closely held firms are increasingly turning to the bourse to raise capital, she said.

“There is a lot of demand, and still not enough on offer,” Coulibaly said. “But it’s changing.”

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