BRVM update 2015

As is the tradition (though one that’s about to end) the end of the year at Drogba’s Country is the moment for an update on the West African Stock Exchange (BRVM), based in Abidjan. As a recap, I started investing in 2011, and since then have seen what I consider to be quite decent growth – 17.8% (in the first 8 months) and then annual growth of 27.2%, 31.4%, and 18.6% respectively. I wanted to use this blog to highlight the little known exchange, and chart my progress (funds managed by the bank that makes investment decisions that I have no influence over). The BRVM is in the West African Monetary zone, and so uses the Euro-pegged CFA, meaning that investments don’t suffer from the inflation seen elsewhere on the continent, even if they have fallen slightly with the Euro over the past few years, relative to the dollar and Sterling.

For various uninteresting reasons, I’ve already closed my books on 2015 and start things for 2016. This year has seen growth of…44.1% – definitely the best yet. Indeed according to a recent article (in French), the BRVM has been classed as having the highest returns in Africa. As I’ve explained before, the Abidjan-based stock exchange doesn’t seem particularly logical – it hardly dropped during the Ivorian crisis of 2010-11, and in the aftermath of October’s elections (which to investors relief went peacefully) the situation has been stable albeit with a slight decline in positions. So I have no visibility on 2016.

I recently met an anthropologist who had spent several years studying the stock market boom in Vietnam – something that prompted a huge rush to invest with people taking out mortgages to finance further investment, only for it all to crash with declines of 40% in a few months. Of course such events are not infrequent in emerging economies (and of course elsewhere), and these investments have their risks. Past growth no guarantee of future returns, and all that. Nevertheless, there’s no sense of a boom around the stock exchange in Abidjan, which has not entered the popular imagination despite the growth I’ve detailed above. My hope is that the current good run will continue for at least another few years. When things turn sour, I’ll re-evaluate things, and I’ve already started diversifying into other areas.

This will be the last of these regular posts on this subject: I think the point has been made. But if it all crashes around my feet, I will tell you all about it. As I’ve said before, this particular investment seems a good way to participate in the West African growth story, while also (particularly for the diaspora) offering a better return on investment than the typical mix of badly run and high-risk schemes like rubber planting, taxis and boutiques.

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