VENTURES AFRICA – West Africa’s BRVM Bourse will lengthen exchange hours – to a six-hour trading day – to advance its performance, it has emerged.
The BRVM is currently open from 9 to 10.45 AM local time.
The exchange will also urge smaller companies to list while supporting a tie up with neighbouring exchanges.
Reuters reported that the Ivory Coast-based bourse began trading in 1998 and listed nearly 40 companies mainly from French-speaking West Africa.
However, Reuters reported, BRVM Bourse has been overshadowed by more dynamic stock exchanges in Anglophone Ghana and Nigeria.
Edoh Kossi Amenounve, who was appointed the bourse’s new director on October this year, plans to set up a second-tier exchange to encourage listings from small and medium-sized enterprises across the West African Economic and Monetary Union – an eight nation group of mainly French speaking countries which uses the CFA franc as its currency.
Not many exchanges have a second tier exchanges in Africa. South Africa is one of the countries that have a second tier exchange. South Africa has more mature capital markets in the continent.
South Africa offers investors frontier markets-type growth, but with more liquidity, more mature capital markets, greater data richness and greater transparency.
Although markets such as Nigeria, Kenya, and Ghana hold great potential for sustained high growth, South Africa is the most mature stock market on the continent.
It comprises nearly 90 percent of total Sub-Saharan Africa market capitalization, and its listed companies will participate in the upside of less mature markets, making it an ideal entry point for US investors who want to allocate to Africa.
As capital controls are relaxed through tax treaties and lower barriers to direct foreign investment and profit repatriation, new capital can flow more easily into Africa. South Africa is the primary beneficiary of this development.
This should greatly increase intra-African trade, which is currently only 10 percent of total African trade.
Amenounve said he would also push for some listed companies to improve the availability of their shares by splitting their stock into cheaper chunks, as Senegalese telecoms company Sonatel’s did in November this year.
Sonatel, whose share price had risen beyond the range of many investors, conducted a 10-for-1 stock split to 14,000 CFA ($29) last Friday. Stock splits have been historically rare on the West African exchange.