In 1973, UMOEA members signed a treaty on the creation of a regional financial market. 19 years later, it was finally decided to create one. After extensive negotiations between member countries, a Regional Council for Public Savings and Financial Markets was formed in October 1997, and in September 1998 the world’s first regional stock exchange, the Bourse Regionale des Valeurs Mobilieres (BRVM – Regional Stock Exchange), finally opened. The existing Abidjan bourse officially closed on December 31 1997.
The new bourse links the French-speaking member countries of the West African Economic and Monetary Union (UMOEA) – Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo. Although the bourse is a private sector institution, the project was led by the UEMOA central bank, the BCEAO, and member governments.
Initially, 35 companies were quoted on the BRVM. Its total capitalisation at inception was just over 2,904 billion CFA francs (US$5,143 billion). The October 1998 listing of its first non Ivorian company, Sonatel, the Senegalese telecommmunications group, raised total market capitalisation more than 20% to roughly 1.1 bn CFA francs.
The exchange has a number of brokerage firms (SGIs), which record clients’ bids and refer them to the national branch of the exchange in each member country, which then reroutes them by telex to the BRVM headquarters in Abidjan. From Abidjan, where the decentralised quoting takes place, the results reach the SGIs via the national branches. The West African stock exchange’s quotation index is BRVM10.
Trading on the new bourse is computerised, with satellite links. In due course, trading will become real-time.
Operations at the BRVM are settled by a central clearing house, the Banque de Reglement. Trading occurs three times a week (Mondays, Wednesdays and Fridays) . All orders are filled at a price set at a fixing once a day. The bourse is expected to take account only of Ivory Coast holidays for trading and settlement purposes.
Trading volumes on the bourse remain low. Rules limit share prices from falling or rising by more than 7.5%, compounding difficulties in an already illiquid market. The period for settlement is variable although the market is moving towards a T+3 settlement period. The Stock Exchange is also aiming at dematerialising and immobilising securities and the authorities are developing a Central Depositary. Bonds are already dematerialised in the Caisse Autonome d’Amortiseement.
Withholding Tax on Dividends is 10%.
There is no capital gains tax.
There are no restrictions on foreign ownership although the authorities keep an eye on activities in this regard. All holdings of more than 1% of the share capital of a listed company must be declared to the authorities. The Cote d’Ivoire’s ministry of finance and economy also reserves the right to set foreign ownership limits.