July 8, 2020 / 2:40 PM / a month ago

Covid-19 crisis boosts West Africa's BRVM bonds market

ABIDJAN, July 8 (Reuters) - The value of the West African BRVM bourse’s bonds market topped the equities market for the first time in March, reaching more than $8.8 billion by the end of June as epidemic-spooked investors sought refuge in bonds, the head of the exchange said on Wednesday.

The Abidjan-based regional bourse trades shares of 46 companies, including Senegalese telecoms company Sonatel , Burkina Faso’s main telecoms operator, Onatel , and lender Societe Generale Cote d’Ivoire. The bonds of several companies and countries are also listed on the exchange.

Before the COVID-19 crisis, the equity market had always been bigger. But by end-June the bonds market’s total value had reached over 5.1 trillion CFA francs versus the equity market’s 4 trillion CFA francs.

In January to June, as the coronavirus epidemic prompted lockdowns around the world, the bond market grew around 20% in value, while the equities market lost 13%.

“The bond market served as a refuge for investors in the most difficult period that was marked by great uncertainties,” BRVM Chief Executive Edoh Kossi Amenounve told Reuters.

In the first quarter, the BRVM recorded 1.07 million securities traded on its bonds market - nearly three-times as many as were traded in the same period in 2019.

Amenounve said one lesson from the crisis was that the bond market could become more and more active over the next decade, including via innovative instruments such as diaspora bonds, green bonds, climate bonds, social bonds and basket bonds.

The exchange is seeking to accelerate the development of green exchanges with a sustainability and climate focus, as well as improving digital technologies to facilitate cyber trading, he said. ($1 = 578.0300 CFA francs) (Reporting by Loucoumane Coulibaly Editing by Alessandra Prentice and Peter Graff)

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