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(Ecofin Agency) – The average value of transactions on the BRVM is now close to CFA2 billion ($3.3 million) as of December 17, 2021. Although this figure represents a real progression in this market, it remains low compared to other markets of the same size.
Twenty-five years after its creation, liquidity remains a challenge on the WAEMU Regional Securities Exchange (BRVM). A group of experts discussed the issue last December 18 in Cotonou, Benin, and came up with some proposals. Professor Lamine Mbengue of the Gaston Berger University in Saint-Louis, Senegal, believes that financial inclusion via mobile wallets could be a solution. Other experts call for greater awareness of stock market culture among issuers to have diversified products for investors and to increase the number of savings holders on the market. Another solution they came up with was to promote the regional stock market on the international capital market.
“We must convince international investors, showcase our dynamism, and attract them to our markets. We can do this through the indexes and securities of our market,” according to Serges Ekue, President of the West African Development Bank (BOAD), who participated in the discussions.
Speaking about the liquidity issue, an expert said: “there is always a demand that is not satisfied. The liquidity of security also depends on its availability. In both the bond and equity segments, what we see is that demand in the secondary market is not always met, and we have a trend ratio that is permanently above 100%. If capital seeking investment does not find any opportunities, it will look for other solutions elsewhere.”
This particular point seems to be a priority for the BRVM management team. Work is reportedly underway to diversify the range of financial products on the market to attract more savings. In addition, the Central Bank of WAEMU (BCEAO) is leading the process of transforming monetary cooperation, which should affect overall liquidity within the WAEMU economy.
This year, the BRVM composite (the main index) has a potential gain of 34.5%, according to the most recent data. Overall, the regional market has maintained an average return of 6.18% in a context where inflation does not exceed 3%.
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