2023-05-26 10:04:53
The Regional Stock Exchange (BRVM) is an opportunity for economic operators and a means of financing companies. In this interview, Edoh Kossi AMENOUNVE, CEO of the BRVM combs through the opportunities of the regional stock market.
The Economist: The regional financial market is currently showing a satisfactory evolution, the BRVM seems to be resilient like the whole Union for that matter. Mr. Aménounvé, you are the Managing Director of the BRVM, tell us, have the rise in inflation rates and the slowdown in growth not had an impact on the BRVM?
Doctor Edoh Kossi AMENOUNVE: Thank you for having me on your set. We are indeed going through difficult times on the macroeconomic level at the global level with, I would say, the succession of crises that we are experiencing and the impact of these crises on the world economy but also on the capital markets. Indeed, as you mentioned, we reached record inflation rates last year, which required central banks to take measures to be able to curb this inflation, which was too high. The consequences are that we must also note a slowdown in global growth and also in our sub-region, since according to forecasts, global growth would stand at 3.4% in 2022. Obviously, when growth slows down, when rates are high, this is not necessarily good news for the capital market, since companies will be resistant to borrowing at high rates because the financial cost of debt becomes more important for them. The slowdown is causing investors to be worried, to be cautious, before investing their savings. So, the consequence is that, it caused a bit of a slowdown in the stock market. This is what we saw in 2022 with the MSIA World Index down 17% and the Emerging Markets Index down 19%. The BRVM was resilient, we rose slightly by 0.46%, which is already a good thing. This means that, for the time being, investors here are not worried and companies continue to have a solid mentality which reassures the market.
Today, regional financial markets face challenges related to the integration of financial centers and payment systems. Does the BRVM intend to take measures to meet this challenge?
The BRVM is an integral part of the stock exchange interconnection project, whether regionally, with Ghana and Nigeria, or globally or continentally, with other African stock exchanges. This is an important project for us and which is structuring for the development of capital plans but also for the economic development of our countries. We have launched the interconnection platform which today makes it possible to connect the seven main stock exchanges on the continent. Naturally, there are a number of challenges to overcome for this interconnection to produce the desired effects. It is therefore a question of settling the issue of payment systems so that we can unravel the transactions that take place between the various stock exchanges, and there is also the issue of the regulation of the increase in exchange rates to ensure that everything is working fine now. But what is important to note is that the objective of integration is to enable companies to raise resources across the entire continent. So that where resources are available, they can be accessed to fund the economies that need them. I think it’s a noble objective that falls within the framework of the economic, monetary and commercial integration that is underway in Africa.
The issue of SME financing is close to the heart of WAEMU countries. So has the BRVM taken up this issue?
The BRVM began several years ago to look at how we can give SMEs in our Union easier access to the capital markets. In this context, we have created a third compartment for our SMEs with reduced conditions for access to the stock market. But we found that, unfortunately, SMEs are not always ready or equipped to access capital markets. That’s why we have set up a training program. The idea of this program is to prepare SMEs for a number of years to access the markets, to prepare them in terms of governance, in terms of the production of quality financial training but also in terms of strategic vision for long-term development. This is what we have done with SMEs in the sub-region. We have certified 14 of them and we are working with these SMEs to facilitate their access to the stock market. It is an ongoing process. We are going to work with other SMEs, there are Togolese SMEs that are in the program and we intend to continue this support effort over the coming years so that these SMEs can access the stock market. There is of course the question of the debt of SMEs, because it is not just the opening up of capital, so we are in the process of imagining debt financing mechanisms for these SMEs and in particular Basket bonds and the mini leaps we are working on with development partners.
What innovations are expected at the BRVM for the next few years?
A stock market must continue to innovate, we have been in the process of innovation for about ten years. Today, we mainly work on certain projects which seem to us to be structuring projects. First, there is the creation of a derivatives market to provide risk management instruments to investors who want to invest in our market. We plan to launch this market within two years once all the conditions have been met and we have made market players aware of the issue. We are also working on a market for agricultural products which should not only see the light of day in certain pilot countries with a regional vocation that we must give it within the next few years. That too is to enable agriculture to be better financed in our countries. We also have a project that should allow us to take into account climate issues, development issues, social and sustainable development issues. We are working on the financing of green bonds, social bonds, diaspora bonds so that our market can be dynamic and also offer this window to investors on these products, which are extremely important today for the economic and social development of our country.
Tell us, were the BRVM Awards a success here in Lomé?
We actually held the BRVM AWARDS in Lomé. First, we are delighted that the Togolese authorities at the highest level have decided to sponsor the event. We therefore want to express our gratitude to the Head of State of Togo. We attended a beautiful opening ceremony with the effective presence of the Prime Minister of the Togolese Republic. That’s already strong support. We were able to bring together communicators who were able to animate the various panels, the workshops, discussed the major subjects which today are subjects which concern us at the level of the market and which should enable us effectively through these discussions to identify avenues of solutions to be able to improve the functioning of our market. Now the last part of the Awards is really the awards for the best of the best. We welcome that. I think it’s a success. It’s a new experience to be repeated and it’s also an opportunity when we go to a country to promote the stock market, to be in contact with the authorities, to be in contact with the private sector, to ensure that together we work on the development of the BRVM.
The Fifth Edition of the BRVM AWARDS will take place in which country?
We have not yet made a decision in this regard. But it will probably be another country in the sub-region. We have already visited Côte d’Ivoire twice. We have done Senegal, we have just done Togo. So we are going to one of the countries that remain in our Union. As the Stock Exchange has a regional vocation, we must actually be able to seize the opportunity of this type of event to go to each country in the Union to get people talking about the Stock Exchange.
Your final word
We experienced a keen interest from market players for the event. I would like to thank them all for having made the trip to Lomé. To have come to attend the conferences, the workshops. I would like to take this opportunity to once again urge the regional private sector to take more interest in the stock market in order to be able to raise capital. I would also like to take this opportunity to once again appeal to individual and institutional savers to look to the stock market for stock market investment opportunities and to be able to better remunerate their savings. Finally, my thanks, once again, to the Togolese authorities for the unfailing support that the BRVM had within the framework of the Awards but above all for the hospitality we received in Lomé during these two days.
Transcription : Belmondo ATIKPO
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