BRVM Composite Index down 2.9% YTD

The BRVM Composite Index is down 2.9% year-to-date, reflecting a challenging start to the year for the West African stock market. In a recent interview on CNBC Africa, Miriam Ouattara, Portfolio Manager at EDC Asset Management, provided expert analysis on the factors influencing the market performance and highlighted potential opportunities for investors. Despite the current negative trend, Ouattara shed light on key events and sectors that could drive positive outcomes in the near future. One of the major developments impacting the BRVM market was the trading activity of Sonata, a significant player representing over 35% of the index. Sonata's announcement of an attractive dividend yield and positive Q1 results had a substantial impact on the index, indicating a potential for positive market reaction in response to their performance. While waiting for the market to respond to Sonata, Ouattara also discussed the outlook for sectors outside of telecommunications, particularly focusing on the banking sector. She noted that 2018 was a challenging year for the banking industry due to the default of a major Coca-Cola exporter, leading to large provisions by banks. However, despite these challenges, many banks remained resilient, showing a growth of 4% and signaling potential improvements in results if no major events like defaults occur in 2019. The banking sector was identified as a strong and resilient industry in the region, providing a positive outlook for investors. Ouattara also expressed optimism towards the agro-allied sector, highlighting Cote d'Ivoire as a key player in agriculture. The country's dependence on cocoa exports makes it sensitive to commodity price fluctuations, as seen in the impact of the default of a major exporter in 2018. In addition to cocoa, oil, and rubber, Ouattara mentioned Sodeci as a company worth considering for investment due to its ability to manage costs effectively and maintain positive net income even during price fluctuations. The expert analysis provided by Miriam Ouattara offers valuable insights for investors navigating the BRVM market amidst challenges and opportunities. Despite the current downturn, the market shows signs of resilience and potential for growth, particularly in sectors like banking and agro-allied industries.