Trading activity, investor sentiments and positive returns by the Bourse Regionale des Valeurs Mobilieres Composite Index (BRVM-CI) have not been heavily impacted by the recent coups in the West African sub-region which has seen most of the recent spate of coups on the African Continent.
With the exception of the year 2020 where there was a general decline in the performance of the BRVM-CI (prior to the August 18, 2020 Coup in Mali) with the index falling from 156.59 points in January to 123.79 points in mid-October before rising to 128.18 points at end-October 2020, further continuing its positive returns to date.
Strong performance of listed equities from non-coup countries particularly Ivory Coast has largely lessened the likely adverse impact of the recent coups on the performance of the regional bourse.
Equities from coup-affected countries ie Mali, Burkina Faso and Niger form a minority (8.69%) of listed equities on the BRVM, hence its impact on the BRVM-CI performance is not significant.
However, equities from Ivory Coast form 69.56% of listed equities on the regional bourse, hence, in the event that there is a toppling of the current government, this is expected to negatively impact the performance of the regional bourse and cut short its positive returns trajectory since late 2020.
The year-to-date returns/gains recorded by the BRVM in local currency – West African CFA franc (XOF) – as at September 8, 2023, was 4.69%.
Local currency year-to-date returns as at September 8, 2023, by the stock exchange of the West African sub-region’s two biggest economies (Nigeria and Ghana) which are the NSE-ASI and GSE-CI are 32.96% and 25.69% respectively.
However, in terms of dollar returns, the BRVM outperformed the two stock exchanges recording 6.07% year-to-date returns as against the -20.31% and -2.46% year-to-date returns recorded by the NSE-ASI and GSE-CI due to weak local currencies (naira and cedi).
BRVM equities undervalued
Equities listed on the BRVM stock exchange are generally undervalued.
Data from the EquityRT platform indicates that price-to-book-value ratio (P/BV) of listed equities is averagely below 1, an indication that most equities on the regional bourse are undervalued, presenting a significant opportunity for value investors.