BRVM: Bloomfield Investment’s analysis on a declining 2017 year

The BRVM finished a year 2017 down, in the wake of a year 2016 far from famous (-3,9% of BRVM C) after the glorious 4 2012-2015 where indices had exploded at + 88,2%. In such a context, as a precaution and convinced of having reached maximum values, investors have begun to fall back.

In its annual stock market analysis report, Bloomfield Investment points to this predictable situation, ignoring a favorable economic environment.

The agency puts forward several factors. First the correction of values, after a year 2012-2015 marked by record valuations. Then the decline in the results of some companies (2016 exercise and during the 2017 fiscal year) has finally convinced some investors. Some therefore withdrew « fearing the depreciation of their portfolios or the loss of capital gains realized in previous years in view of the downward market trend. »

Bloomfield also discusses the reorganization of investors’ portfolios to take advantage of new listings. It should be remembered that the NSIA Banque and Ecobank Ivory Coast OPVs were oversubscribed to record levels in one day.

Moreover, by examining the graphs presented in the report, the BRVM Composite and BRVM 10 indices both started their decline since the end of 2016, almost without interruption, before a late recovery attempt in November.

Moreover, if we refer to benchmark indexes, the BRVM remains the only market in emerging and frontier markets to record a decline. The stock markets of Nigeria, Kenya, Mauritius, South Africa, Egypt, Tunisia and Morocco, saw their benchmarks increase between + 7% (MASI in Morocco) and + 43% (NYSE All Share, Nigeria).

The BRVM Composite and BRVM 10 Indices fell by 16,81% and 16,15% respectively by 2017. Capitalization of the equity market fell from 11,29% to 6 836 billion FCFA (against 7 706 billion end 2016), and that of the bond market recorded, on the other hand, double-digit growth (+ 18,34%) to 2 978 billion FCFA.

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