Archive for the 'Cote d’Ivoire' Category
June 12th, 2013 by Tom Minney
Africa’s top lending institution the African Development Bank (AfDB) has announced that it will start moving its headquarters and 1,500 employees from Tunisia to Cote d’Ivoire (Ivory Coast), with first staff to move this year. It had abandoned Abidjan in 2003 during the series of civil wars.
This is not news to those paying attention at the AfDB’s annual meetings summit in beautiful Marrakech, Morocco, from 27-31 May. The Boards of Governors of the AfDB and of the African Development Fund (ADF) announced the return of the AfDB to its headquarters in Abidjan.
However, for those of us who were not, the formal press release came out yesterday, and was covered in the Financial Times blog beyondbrics. The bank held about $32.25bn in assets issued loans and grants worth $6.46bn in 2012. Its funding goes to governments and businesses on the continent.
Donald Kaberuka, the AfDB President, said in the press release: “The first group of staff will leave before the end of 2013. The AfDB will celebrate its 50th anniversary in November 2014 in Abidjan”. There had been increasing bank meetings in Abidjan this year and the news was widely anticipated.
According to Borzou Daragahi writing in the FT blog: “The African Development Bank’s move, to begin by the end of the year, delivers a blow to the economy of Tunisia, which is recovering from a 2011 uprising and the ensuing political instability. But it will bolster confidence in Ivory Coast, a sub-Saharan African nation emerging from years of war and political unrest. It marks a milestone in what many analysts see as the resurgence of sub-Saharan Africa in general and the Ivorian commercial centre of Abidjan in particular.”
It quotes an unnamed “development official” in Tunis as saying: “If the bank can survive in Abidjan, it sends a very strong signal that Abidjan is back as the commercial heart and economic centre of west Africa.”
According to the blog the announcement stunned many staff, of which nearly 70% were hired since the move to Tunisia. However, it adds that some bank staff had complained of being treated poorly by locals in Tunis, an Arab country where darker skinned Africans are sometimes regarded as illegal migrants.
According to the press release, the Board of Directors of the AfDB Group had instructed its management during the annual meetings held in Arusha, Tanzania, in 2012 to prepare a “roadmap” (will they drive there? Surely planes are better) for a well-planned and organized return. This should “guarantee the institution’s stability, business continuity, and the well-being of staff and their families”. The AfDB’s Advisory Committee of Governors, meeting in Tokyo, Japan, in October 2012, consented to the roadmap, recommended its approval by the Board of Governors, thus opening the way for the return to Abidjan
Wikipedia describes Abidjan as the largest city in Cote d’Ivoire in 2011 and “third-largest French-speaking city in the world, after Paris and Kinshasa, but before Montreal”. In 2006, national authorities said there were 5,068,858 residents in the metropolitan area and 3,796,677 residents in the municipality, making it second only to Lagos in the region. Although the political capital is Yamoussoukro, Abidjan is the economic capital and also a cultural hub in West Africa, with a lot of industry. It in Ébrié Lagoon, on several converging peninsulas and islands, connected by bridges.
December 14th, 2012 by Tom Minney
A West Africa private equity fund, Fonds Cauris Croissance II, says it will invest 4 billion FCFA (XOF, equivalent to $8 million) in Azalaï Hotels to fund an ambitious expansion programme in the region. The investee company, Azalaï Hotels (www.azalaihotels.com), operates 6 hotels in Benin, Burkina Faso, Guinea Bissau and Mali and is expanding into new countries, including Côte d’Ivoire, Guinea Conakry and Senegal.
Azalaï Hotels is to start building a hotel in Côte d’Ivoire in January 2013 and plans to open late in 2014. The company began operating in 1994 in Mali and has expanded its presence into 4 countries through opening or acquiring 3- to 5-star hotels, according to a press release.
Fonds Cauris Croissance is managed by West African fund manager, Cauris Management (www.caurismanagement.com).
Cauris Investment, the first fund managed by the same manager, previously invested with the Azalaï Hotels group in 1998 to finance the construction of a hotel in Mali and the first regional expansion. Cauris Investment exited in 2006.
Commenting on this new investment, Mr. Mossadeck Bally, founder and CEO of Azalaï Hotels said: “The partnership between Cauris and Azalaï Hotels is a sign of mutual respect between our institutions. Cauris is the private equity institution that best understands the specificities of local entrepreneurs while following its own requirements for commercial returns. After a first mutually beneficial partnership, it is with pleasure that we will enjoy again Cauris’ experience both in hotels and in other sectors.” Azalaï Hotels says it is the first locally owned hotel chain in West Africa to offer services at international standards.
Noel Yawo Eklo, CEO of Cauris Management, said in the press release: “After a first positive experience, we think it is important to support Azalai Hotels in its development programme, especially now that it is about completing the regional mapping and strengthening the profitability of a group composed of very seasoned professionals. The hospitality sector is a difficult one to operate in globally, but it is rewarding as it also creates much-needed jobs”.
Private equity fund manager Cauris Management has been active in West Africa, mainly the francophone countries, for over 15 years. Cauris Management has invested in 42 companies and exited 35 in its target region. The investment portfolio has included agribusiness, financial services, hospitality, telecoms, consumer goods, and downstream oil and gas.
Earlier this year, in March-June, Cauris exited its stake in Petro Ivoire, a downstream oil and gas operator in Cote D’Ivoire, according to this report on Private Equity Africa. The deal was structured as a management buy-back and generated annualized returns of 23% for Cauris which first backed the company in 2006 in a CFA2.2bn deal in partnership with Africinvest. The company was expanding into bottled gas. During the five years the investors were involved, Petro Ivoire grew its network of petrol stations by 33% and is thought to be the third largest operator, and to have 19% of butane gas market after investing in a butane gas filling plant in 2007.
November 29th, 2012 by Tom Minney
New giants are arising in African investments – the domestic pension funds. In Nigeria the National Pensions Commission (PenCom) estimated registered pensions to be worth US$14bn in June 2011, with asset values up by 8% in three months; Namibia’s Government Institutions Pension Fund alone is worth some $6bn; South Africa’s pension funds grew at a compound annual growth rate of 14.3% in US dollar terms over 10 years to December 2010, including over 28% in 2010 and Tanzania’s pension industry was audited at $2.1bn for 2010, and growing by 25% a year.
The number of pensioners is set to soar, according to United Nations figures, as the number of people over 60 years in Africa will rise from 55m in 2010 to 213m by 2050, compared to 236m Europeans over 60 years old by 2050. Current pension funds cover only 5%-10% of Africans ranging from 3% in Niger but it used to be 80% in North African countries such as Egypt, Libya and Tunisia. Pensions are not available at all in some countries.
Regulatory reforms are driving the growth of African pensions. Recent reformers include Cote d’Ivoire, Gabon, Kenya, Nigeria, Senegal and Uganda. Ghana created a National Pensions Authority with a 2010 act. Reform in Kenya, including investment guidelines and a new regulator, resulted in strong growth and good investment returns. Tanzania passed the Social Security Regulatory Act in 2008. The rising pension industry is likely to boost fund management and equity industries, exits for private equity and even to fill some of the $45bn annual funding gap for infrastructure. For instance, In January 2012, Tanzania’s National Social Security Fund signed an agreement to finance 60% of the $137m cost of building Kigamboni Bridge. South Africa’s $130bn Government Employees Pension Fund is a major investor in the Pan-African Infrastructure Development Fund which raised $625m in 2007 and is targeting $1bn on its second offering.
For more details on Africa’s pension industry, please check my article published in The Africa Report magazine and website, here is the link www.theafricareport.com and for brief profiles of 6 giant African funds, check here.
October 5th, 2012 by Tom Minney
The World Bank has cut its growth forecast for sub-Saharan Africa. Earlier in the year it forecast 5.2% growth overall for SSA economies in 2012, but yesterday (4 Oct) it cut this to 4.8%. World Bank said in its bi-annual Africa’s Pulse report that Africa is still vulnerable to a fragile global economy and a slowdown in China, although high commodity prices and an increase in exports from countries that have made mineral discoveries are likely to underpin growth for the rest of 2012.
Africa achieved 4.9% growth in 2011. According to the study, excluding South Africa, the continent’s biggest economy, growth is likely to hit 6% in 2012. Strong performers are expected to include countries such as Mozambique, home to some of the world’s biggest untapped natural gas reserves, and Sierra Leone which has started exporting iron ore, according to a story on Reuters. Foreign direct investment (FDI) is projected to rise to $48.7 billion by 2014 from $31bn in 2012, as investor interest in Africa soars. African exports rebounded in the first quarter of 2012, growing at an annual pace of 32%, up from the -11% pace recorded in the last quarter of 2011.
World Bank Vice-President for Africa, Makhtar Diop, said in a press release: “A third of African countries will grow at or above 6%, with some of the fastest growing ones buoyed by new mineral exports and by factors such as the return to peace in Côte d’Ivoire, as well as strong growth in countries such as Ethiopia. An important indicator of how Africa is on the move is that investor interest in the region remains strong.. despite difficult global conditions.”
Most of SSA “middle income” by 2025
The majority of sub-Saharan Africa’s 48 countries could also achieve middle-income status by 2025 though their dependency on natural resources is likely to continue in the medium term, it added. Shantayanan Devarajan, the World Bank’s chief Africa economist, said that this highlights the need for governments to spend their resource wealth wisely and focus on public investment: “Resource-rich African countries have to make the conscious choice to invest in better health, education and jobs, and less poverty for their people because it will not happen automatically when countries strike it rich,” he said.
Diop said there was an opportunity for “strengthening economic transparency and financial controls around the new discoveries, to leverage their full potential through development policies that increase economic growth, create jobs, reduce poverty, and improve health and education especially for young people and future generations, while balancing the immediate needs.”
The World Bank said that after 10 years of economic advancement, 22 of Africa’s 48 countries have officially achieved middle-income status and another 10 could reach middle-income status by 2025 if current growth trends continue. It warned that recent soaring prices for wheat and corn were a concern, after the worst U.S. drought in 50 years. Africa’s Sahel region is already suffering from higher food prices, high rates of malnutrition and recurring crisis and insecurity. Furthermore, swarms of desert locusts and the ongoing conflict in The Sahel also undermine the region’s food security, including Mali and Niger.
Development gains – poverty and child mortality down
Child mortality has also been declining. Between 2005 and 2008, for the first time the absolute number of people living on $1.25 a day fell, as poverty rates on the continent have been falling faster than one percentage point a year. With fast population growth Africa is urbanizing rapidly and 41% of Africans live in cities, with an additional 1% every 2 years. By 2033, Africa – like the rest of the world – will be a majority urban continent. The bank says this has deep implications for social and economic opportunities as urbanization and development go together and it claims that no country has ever reached high income with low urbanization.
December 22nd, 2011 by Tom Minney
The International Finance Corporation (www.ifc.org), a member of the World Bank Group, on 20 Dec agreed to invest some CAD1,250,000 (Canadian dollars, equivalent to US$1.2million) in nickel and copper exploration. Sama Resources Inc (www.samaresources.com) will use the funds raised to advance the Samapleu project in eastern Côte d’Ivoire, near the border with Guinea, which it hopes will provide future jobs and government revenues to Côte d’Ivoire. The transaction is set to close in December.
The country has significant mineral resources but development of the mining sector has been hampered by political and military crisis during the past decade. IFC’s support to the Samapleu project will help promote good environmental and social standards in the country’s mining sector and send a positive signal for future foreign direct investment in the country.
IFC will work with Sama to ensure that exploration and any subsequent mine development is carried out in an environmentally and socially sustainable manner.
Dr. Marc-Antoine Audet, President and CEO of Sama, said in a press release (search “samapleu” on IFC website): “Sama is pleased to welcome IFC as a shareholder and partner on the Samapleu project. We look forward to drawing from IFC’s expertise to help ensure that the progress at Samapleu follows global best practices for the mineral exploration industry, the environment, and for working with local communities.”
Tom Butler, IFC Global Head for Mining, added: “We are excited to be making IFC’s first mining investment in Côte d’Ivoire through Sama, a company we believe has the leadership and resources to make the Samapleu project a success. This investment aligns with our strategy to support early-stage exploration companies with financing and advice.”
IFC offers mining clients in developing countries a broad range of financial and advisory services throughout the mining life cycle. Its early-equity investment programme is to help exploration-stage companies, such as Sama, with financing and advice on best practice in environmental and social management.
IFC is the largest global development institution focused only on the private sector. In fiscal 2011, investments climbed to an all-time high of nearly $19 billion.
IFC is acquiring 3,968,254 units, each of 1 common share and 1 warrant, out of 5,105,539 units offered by Sama to IFC and 2 other investors in a private placement. Each warrant entitles the holder to purchase 1 common share of Sama at an exercise price of CAD0.4725 per common share for a period of 4 years, subject to Sama’s right to accelerate the expiration of the warrant.
The issue price per unit is CAD0.315 Canadian dollars. It is expected that after completing the subscriptions to IFC and the other 2, there will be 66,013,174 Sama common shares outstanding and IFC will directly hold approximately 6.01% of the outstanding share capital and approximately 11.34% of the outstanding share capital if it exercises all its warrants
About Sama Resources
Sama is a growth-oriented resource company focused on exploring and developing nickel-copper-sulphide and laterite resources in West Africa. Its goal is to become the first poly-metallic producer in the region along side its joint venture partner SODEMI (Société pour le Développement Minier de Côte d’Ivoire – www.sodemi.ci). Its key assets are Samapleu project in Côte d’Ivoire and Lola project in Guinea, both in exploration phase. Future production from Samapleu will be managed by a joint venture controlled 66⅔% by Sama Nickel Corporation, a wholly-owned subsidiary of Sama, and 33⅓% by SODEMI. The licence encompasses 449 square kilometres and hosts nickel-copper and nickel-cobalt rich laterite deposits, and the newly discovered massive chromites occurrences.
The Lola project is 100% owned by Sama and encompasses 1,212 square kilometres adjacent to the Samapleu project. The Lola project has strong potential for nickel and copper mineralization and nickel-cobalt rich laterite.
October 20th, 2011 by Tom Minney
Moving back to Cote d’Ivoire may be on the agenda for the African Development Bank (www.afdb.org), according to an interesting story on the website www.devex.com (you may have to sign in to read it?). The bank fled from Abidjan in a rush in 2003, as rebels advanced on Abidjan in the brutal and all-encompassing civil war. Now the new Cote d’Ivoire President Alessane Ouattara wants it back. and it was on the agenda at the bank’s AGM in June in Lisbon, although it may take up to 3 years before this happens.
The article also notes that the bank is increasingly important and playing a bigger role as an African institution in channeling funding to African projects.
In January 2011, the bank lived through Tunisia’s jasmine revolution, although one bank staff member told me that it did not much affect the area around their building, as street action was mostly concentrated in other parts of town. They did miss a few days work, before bosses had them back in action.
According to the article, AfDB president Donald Kaberuka said uncertainty over the permanent location of the bank had a “significant effect” on morale, frustrated “horizon planning” and was difficult for the human resources department. Some bank staff may be happy to leave Tunis, others not.
Ouattara, who got into power in April 2010 after being blocked by his predecessor, Laurent Gbagbo who disputed the election result, is moving fast to re-establish Abidjan as the financial hub for West Africa and has been lobbying hard for the bank. It is not sure what the criteria for the move are, but it is possible they will need to see at least another successful multi-party election and a period of stable government.
The AfDB attended Ouattara’s inauguration and was a leader in an accelerated package of loans to help the new administration and initial renovation has started for the bank’s headquarters in Plateau district, according to the article.
New confidence, bigger role going forward
Then bank also led multilateral lenders to sign of $1 billion in loans to Tunisia’s new administration. Kaberuka, a former finance minister from Rwanda, reportedly says that after the political shocks, swift intervention can limit collateral damage. The African Development Bank is credited for its role after the 2008 global financial crisis in encouraging African states to apply fiscal restraint but to ease potential economic disruption through investment in infrastructure, and many countries are praised for successful countercyclical interventions.
The article also argues that the bank is increasingly the biggest and best bet for Western donors who are its principal shareholders. Experienced author Mark Ashurst writes: “As the bank’s loan book grows bigger and more diverse, donors, including the United States, Germany and the United Kingdom, are keen to devolve the task of managing their African exposure to an African institution.” He adds that the bank has done a skilful job of developing a terminology that avoids words such as “conditionalities” and uses “policy-based lending” and success in developing the skilful balancing acts required to work with nations. It also reflects aspirations for greater African voices in international development policy and it is likely that more international financial institutions could devolve administrative work to the AfDB.
In 2010 the African Development Bank passed the World Bank and became the leading source of multilateral financing for new African infrastructure. The same year, the bank’s sixth general capital increase included pledges to treble the bank’s reserves to $100 trillion by 2021, signalling new confidence. The bank’s loan book is stsill less than the sum of China’s resources-for-infrastructure swaps but the AfDB is much more closely involved than other lenders in African institutions such as the African Union and the Economic Commission for Africa and has a unique standing in the regard with which it is seen in Africa.
The article goes on to argue about the bank’s changing role as growth of 5% a year or more becomes the norm in Africa for coming years. This includes work to support bond and capital markets and leveraging private capital (20%), infrastructure (40%), budget support (20%), industries, including mining and manufacturing (20%). It is well worth reading Mark’s article in full here.
May 13th, 2011 by Tom Minney
West Africa’s Bourse Regionale des Valeurs Mobilieres (www.brvm.org) regional stock exchange is still trading in Bamako this week, but next Monday (16 May) the market will reopen trading operations ino Abidjan, Cote d’Ivoire’s commercial capital. The market had moved operations and started trading in Mali on 1 March because of the violent crisis in Cote d’Ivoire (see our earlier report).
Senior management were already back in Abidjan and banks and stockbrokers were reopening on Monday (9 May) when AfricanCapitalMarketsNews phoned.
According to a report on Bloomberg, Abdelkader N’Diaye information systems director of the BRVM said trading was picking up as situation improved in Abidjan and banks in the city reopened. Former president Laurent Gbagbo was arrested on 11 April and Alessane Ouattara, recognized internationally as winner of last November’s election, was sworn in on 6 May. Forces supporting him had swept through the country in a swift campaign in early April after waiting months for successful international intervention, including from the African Union.
The BRVM smuggled senior management out of Cote’Ivoire in February after security forces loyal to ex-President Laurent Gbagbo occupied the BRVM on 11 February. In an amazing piece of Business Continuity Planning, the BRVM management had all systems including support systems running within 18 days. In March Bloomberg quoted BRVM head Jean-Paul Gillet saying: “We managed to restart the operations of the bourse after we reconstructed the system and the environment. The volume of transactions has been a bit affected, but the prices haven’t dropped as there has been no haste in selling.”
Most banks in Cote d’Ivoire closed about the same time and their branches were taken over. Without the usual custodians and stockbrokers, trading in Mali saw much lower volumes than in Abidjan.
The BRVM lists 39 securities and acts as the regional exchange for 8 countries as an African innovation when it opened in 1998. Sonatel, based in Senegal and including France Telecom as a shareholder, is the biggest listed company with CFA 1.65 trn in market capitalization. Other listings include 8 banks, including SGBCI (Societe Generale SA) and Ecobank Transnational Inc. Ivorian companies make up 33 of the 39 listings, according to BRVM website, and the BRVM Composite Index peaked at 174.89 on 11 Jan, but was 151.46 at close of trading today (13 May) after edging down all week. Michael Barnes, Head of Sales and Trading for Securities Africa said on Monday that much of the pent-up buying and selling had already gone through.
March 31st, 2011 by Tom Minney
Rebel Republican Forces have made a swift advance through Cote d’Ivoire yesterday (30 March) taking the capital Yamassoukro and San Pedro, a key cocoa exporting report according to reports on Bloomberg and Reuters. They have been meeting very little resistance, as soldiers loyal to incumbent president Laurent Gbagbo have either joined them or retreated to Abidjan.
The RF have launched a military offensive to support the claim of Alessane Ouattara, who is internationally acknowledged to have won last November’s presidential election but was then blockaded in a hotel and protected by UN peacekeepers after Gbagbo refused to accept the result.
Meite Sindou, spokesman for Ouattara’s prime minister, Guillaume Soroare said the RF about 90 kilometres north of Abidjan, in a town called Adzope. Bloomberg this morning quotes an interview with Young-jin Choi, the head of the United Nations mission that the advance has been “much more rapid than expected,” and the troops are within “striking distance” of Abidjan.
Fighting in Abidjan, formerly a top West African commercial centre, has already been fierce and the final showdown could be violent. One million people are reported to have fled their homes. Gbagbo is calling the Young Patriots youth militia to boost his troops. Reuters reports: “The army called on Gbagbo’s often violent youth wing to enlist in the military. They have been fired up with anti-French, anti-foreigner and anti-U.N. propaganda, and on Wednesday, the army started openly handing out weapons to them. They have set up roadblocks all over town and have attacked U.N. staff and killed several West African immigrants and suspected Ouattara supporters, Human Rights Watch says.” Amnesty International on 29 March said armed forces from both sides had committed atrocities.
The international and African communities have not intervened militarily and many civilians have been killed – at least 470 deaths reported – and tens of thousands have fled to neighbouring countries. However, there have been many meetings to discuss the crisis and yesterday the UN Security Council voted to step up pressure on Gbagbo.
Bloomberg says the markets hope the 4-month political crisis may end soon. CI has a €2.3 Eurobond which is in default since missing interest payments on 1 February. On 30 March the bond rallied 7% to 42.688 cents on the dollar, according to data compiled by Bloomberg, breaking out of its range of 36-40 cents for recent weeks. Bloomberg adds that prices of cocoa for May delivery fell to $70 (2.3%) to $2,987 per metric ton by 5:20 p.m. in New York, their lowest in 10 weeks, on hopes that a quick victory could pave the way for a renewal of exports.
There is an international arms embargo in place and on 2 March the UN apologized to Belarus for wrongly saying it had supplied Gbagbo with an attack helicopter – the CI airforce used to have Russian Mi-24 attack/transport helicopters.
March 30th, 2011 by Tom Minney
Rebel advances in Cote d’Ivoire are boosting the price of the country’s €2.3 bn Eurobond, which are in default since 1 Feb, in London trading. According to Bloomberg today (30 Mar), the advance boosted the dollar-denominated bonds to their highest in at least 2 months on 29 March as they climbed 4.2% so their price was 39.875 % of face value last night. The yield fell 31 basis points to 8.6%, according to data compiled by Bloomberg.
The country seems to be moving back in civil war, and the Republican Forces, loyal to presidential contender Alessane Ouattara, have taken at least 5 towns this week and moved to within 240 kilometres of Abidjan. The RF stepped up their military campaign in the past month, mainly in the western cocoa- producing region, taking the towns of Duekoue, Guiglo and Daloa in the past few days, and the eastern town of Abengourou on 29 March.
Reuters reports that heavy fighting has flared in the northern Abidjan suburb of Abobo, under control of the Republican Forces. Forces loyal to Gbagbo were accused of shooting civilians again yesterday, adding to a toll in which 460 people are already reported to have been killed. Up to 1 million Ivorians have now fled fighting in Abidjan alone, according to the U.N. refugee agency and more across the country. At least 112,000 have crossed into Liberia to the west.
The problem stems from a stand-off after incumbent president Laurent Gbagbo refused to leave after a Constitutional Court ruling disallowed hundreds of thousands of votes, meanwhile using the military to blockade Ouattara in a hotel where he is protected by UN peacekeepers. Although ECOWAS and the African Union promised strong measures in December and January, they have been unable to muster support for a military intervention to remove Gbagbo and recently the RF started its advance. Last week there were renewed international calls for intervention, wondering what the difference is between Libya and Cote d’Ivoire. The previous civil war was brutal and yesterday Amnesty International already said “All parties to the conflict have committed serious human rights violations including unlawful killings and rape and sexual violence against women.”
Observers seem to hope that the Republican Forces can drive out Gbagbo in a quick campaign and this is the reason for the rising bond prices. The Eurobond was created after Cote d’Ivoire reneged on $3.5bn of “Brady bonds” in 2000. These were fixed-income securities created as part of a debt restructuring plan for developing countries and named after former U.S. Treasury Secretary Nicholas Brady. It issued Eurobonds in April 2010 as part of its debt restructuring at a yield of 10.181%. The default was declared after a 30-day grace period after the country was unable to pay a $29m coupon interest payment due on 31 December.
Cote d’Ivoire’s financial sector had been in chaos since January. The region’s central bank, BCEAO, shut its offices on 27 January in the commercial capital, Abidjan, after finance ministers of the West African Economic and Monetary Union (WAEMU) ordered it not to give Gbagbo access to national funds. Cocoa exports were also halted. Gbagbo ordered the nationalization of foreign banks which had closed during February.
March 17th, 2011 by Tom Minney
West Africa’s regional stock market the Bourse Regionale des Valeurs Mobilieres (www.brvm.org) has started trading from a new base in Bamako, Mali, after leaving Cote d’Ivoire because of the political crisis. Trading restarted in the new office on 1 March, reports Bloomberg news agency, but volumes are much lower.
The bourse suspended operations on 11 February, after security forces loyal to incumbent Cote d’Ivoire president Laurent Gbagbo seized its main offices in Abidjan to prevent it relocating. Once senior personnel were safely out, the BRVM managed to move enough of the settlement and clearing operations to start operating in the new offices. At least 10 commercial banks in Cote d’Ivoire closed and Gbagbo’s forces “nationalized” them.
Bloomberg says that it is only operating for foreign investors since most of the stockbrokers were based in Cote d’Ivoire and their offices were part of the closed banks. However stockbroker Securities Africa says that only locals can trade. Clearing and settlement would also require banks, although the BRVM has an associated regional central depository Dépositaire Central/Banque de Règlement S.A.
The political crisis in Cote d’Ivoire is getting closer to civil war. International bodies including regional grouping ECOWAS and the African Union says that opposition leader Alassane Ouattara, won a 28 November presidential election and is the legal president of the country, but Gbagbo refuses to accept the verdict. The United Nations says that almost 400 people have been killed and tens of thousands have fled. The economy has virtually stopped, with all financial systems, and Cote d’Ivoire’s €2.3 billion Eurobond went into default on 30 January.
The BRVM lists some 39 securities and acts as the regional exchange for 8 countries as an African innovation when it opened in 1998. Bloomberg reports BRVM head Jean-Paul Gillet saying that the value of trading on 15 March was CFA 86 million (US$182,300), down from a daily average of CFA 200 mn to CFA 500 mn in 2010: “We managed to restart the operations of the bourse after we reconstructed the system and the environment. The volume of transactions has been a bit affected, but the prices haven’t dropped as there has been no haste in selling.
“Given the situation in the country, Ivorian companies face difficulties in taking part in trading, so we mostly have international clients at the moment. Companies can’t work from Abidjan because members of their staff are missing or their offices are closed.”
Stockbroker Securities Africa lists the market capital of the BRVM at CFA 3.5 trillion CFA francs. Sonatel (SNTS), Sonatel, based in Senegal and including France Telecom as a shareholder, is the biggest listed company with CFA 1.65 trn in market capitalization. Other listings include 8 banks, including SGBCI (Societe Generale SA) and Ecobank Transnational Inc. Ivorian companies make up 33 of the 39 listings, according to BRVM website, and the BRVM Composite Index peaked at 174.89 on 11 Jan, but has since fallen 7.5%, in line with many emerging markets indices.