APPROACHES TO SECURITIES TRADING

: The case of the West African Stock Exchange – BRVM

Presented by Mr Emmanuel ZAMBLE Operations Manager West African Stock Exchange Author of : « LA BOURSE DES VALEURS : Comment s’initier? » (Stock Exchange : Initiation) Washington, April 15 th , 2003

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Plan

INTRODUCTION OVERVIEW OF THE WEST AFRICAN STOCK EXCHANGE – BRVM CONTRIBUTIONS BY BRVM WITHIN THE WEST AFRICAN MONETARY UNION – W.A.M.U. CONCLUSION

Introduction

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Population :

74.30 millions inhabitants

GDP :

26.17 billions USD with 40% for Côte d’Ivoire ; (2002) Growth Rate : 2.6 % (2002) Inflation Rate : 3.1 %.

(2002) THE CHALLENGES OF BRVM :  To raise more savings to finance investments ;  To Reinforce economic integration within the different countries of the WAMU

Overview of BRVM

1- Shareholders Private investors 25% Financial Institutions 23% Member countries 13% Chambers Of Commerce 11% Brokerage Firms 28%

Overview of BRVM

2- Structure of the Market

 A PUBLIC POLE - Regional Council of Public Savings and Financial Markets (The equivalent of the Securities and Exchange Commission)  A PRIVATE POLE - West African Stock Exchange (BRVM) ; - Central Depositary / Settlement Bank ; - Brokerage firms and other financial institutions

Overview of BRVM

3- Operations Organization

  MAIN CHARACTERISTICS – Electronic exchange ; – Centralized and Spot market ; – Single auction price ; – Paperless transactions ; – Settlement executed on D+5 with an expectation to move on D+3.

TWO CATEGORIES OF MARKET – Stocks market – Bonds market

Overview of BRVM

3- Operations Organization ARCHITECTURE OF THE MARKET

Brokers in their offices or in BRVM A ntenna

BENIN 1

Orders entry by the brokers

5

Transmission of trading bulletin and Central Depositary reports

3

Print transactions reports

HEAD OFFICE OF BRVM 4

Preparation of Central Depositary reports and trading bulletin

Brokers in their offices or in BRVM Antenna

SENEGAL TOGO BURKINA FASO 2

Calculation of the fixing price and allocation of orders

BRVM IN ABIDJAN NIGER COTE D’IVOIRE GUINEE BISSAU MALI

Overview BRVM

3- Operations Organization

.

GUARANTEES

     Automated Central Depositary / Settlement Bank; Market Guarantee Fund ; Investors Protection Fund managed by the brokerage firms ; Risk management ; Notification of disclosure threshold (10%, 20%, 33%, 50%, 66%).

Contributions by BRVM within the WAMU zone 1- Issuers (1998-2002)

1 USD = 650 CFA F

IN IT IA L P U B L IC O FFER IN G ( 1 9 9 8 - 2 0 0 2 )

7 0 ,0 0 0 6 0 ,0 0 0 16 5 0 ,0 0 0 4 0 ,0 0 0 3 0 ,0 0 0 2 0 ,0 0 0 4 0 0 1 3 1 0 ,0 0 0 0 19 9 8 19 9 9 2 0 0 0 2 0 0 1 2 0 0 2 B й n in 4 ,0 0 0 6 ,6 8 0 5 ,0 0 0 B u r k in a F a s o 2 ,5 0 0 C фt e d ' Iv o ir e 5 ,0 0 0 4 7 ,6 4 9 5 ,2 5 3 17 ,5 4 9 6 6 ,9 7 3 G u in й e B is s a u M a li 3 ,0 0 0 4 8 0 5 ,0 0 0 N ig e r 6 S й n й g a l 3 6 ,9 3 7 2 2 ,0 0 0 18 ,5 0 0 5 T o g o 3 9 ,17 1 6 1 7 ,6 6 5 • Most of the member States already made initial public offerings (16 issues from Côte d’Ivoire, 6 from Sénégal, 5 from Togo, etc.) • 66% of the total amount issued by Côte d’Ivoire belong to its government.

• 32% of the total amount issued by Bénin come from its government.

Contributions by BRVM within the WAMU zone 2- Investors SECURITIES OWNED BY COUNTRIES 1999

SENEGAL 3% GUINNEE M ALI 1% BISSAU 0% NIGER 0% TOGO 1% BENIN 9% BURKINA FASO 4% B ENIN M A LI COTE D'IVOIRE 83% B URKINA FA SO NIGER COTE D'IVOIRE SENEGA L GUINNEE-B ISSA U TOGO GUINNEE BISSAU 0% M ALI 9%

SECURITIES OWNED BY COUNTRIES 2002

NIGER 0% SENEGAL 8% TOGO 2% BENIN 19% BURKINA FASO 3% Globalization in progress with BRVM B ENIN M A LI COTE D'IVOIRE 59% B URKINA FA SO NIGER COTE D'IVOIRE SENEGA L GUINNEE-B ISSA U TOGO

Contributions by BRVM within the WAMU zone

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3- Impacts

Increase of savings rate · 1996 = 12,90% · 2000 = 16,05%  More mobilization of long term capital Examples – Treasury bonds of Côte d’Ivoire <-> 98.46 millions USD ; – Bonds of Chemical Industry of Senegal (ICS) <-> 23.08 millions USD; – Bonds of Telecommunication Company of Senegal (SONATEL) <-> 18.46 millions USD; – Bonds of Bank Of Africa of Benin (BOA) <-> 7.69 millions USD.

Contributions by BRVM within the WAMU zone

3- Impacts (continued)    Reinforcement of the financial structure of the private sector ; Lowering of financial transactions cost through BRVM ; Integration of WAMU economic system – No discrimination upon securities trading – No double income taxation – No barrier investment among the WAMU countries

Contributions by BRVM within the WAMU zone

3- Impacts (continued)

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No barrier investment among the WAMU countries

VALUE OF TRANSACTIONS BY COUNTRIES (2002)

GUINEE BISSAU M ALI 0% 0% NIGER 0% SENEGAL 4% TOGO 2% BENIN 9% BURKINA FASO 2% BENIN M ALI CÔTE D'IVOIRE 83% BURKINA FASO NIGER CÔTE D'IVOIRE SENEGAL GUINNEE BISSAU TOGO

Conclusion

 BRVM : An important tool for economic integration of the WAMU zone ;  BRVM : Success recommendable to other economic areas.

www.brvm.org

18, rue Joseph ANOMA 01 BP 3802 Abidjan 01 Côte d ’Ivoire [email protected]