How BRVM companies performed amid the COVID-19 crisis

Reported earnings from companies on the BRVM Stock Exchange have been largely mixed amid the COVID-19 crisis, with some sectors weathering the storm better than others. Myriam Ouattara, Portfolio Manager at EDC Asset Management, sat down with CNBC Africa to discuss the impact of the pandemic on the BRVM and what the future may hold for investors. The COVID-19 pandemic certainly left its mark on the BRVM Stock Exchange, although the impact was not as severe as in other global markets. While the BRVM saw a market loss of about 8% in March, this was significantly lower than the 15-20% losses witnessed in markets like France and the US during the same period. Sectors such as agriculture and distribution took a hit, particularly with the decline in airline activities and prices. Companies in these sectors faced challenges due to reduced demand and disrupted supply chains. Despite these challenges, the BRVM managed to maintain some stability, thanks in part to measures like a 7% maximum daily price variation limit. This helped prevent drastic fluctuations and ensured a degree of market equilibrium. The support systems in place have played a crucial role in cushioning the market from the full brunt of the pandemic. Ouattara highlighted the importance of supporting companies to help them weather the storm and keep operations running. In West Africa, the impact of COVID-19 on health has been relatively contained compared to other regions, which has had a positive knock-on effect on the stock market. In April, the market began showing signs of recovery, with performances starting to trend upwards. Looking ahead, Ouattara expressed a cautiously optimistic outlook for the BRVM market. Despite the mixed earnings reported by companies, particularly in the banking sector, many firms have managed to maintain satisfactory results. The reduction in loan portfolio growth has been offset by lower provisions, leading to continued growth for banks. Challenges, such as the default of a major cocoa exporter in Côte d'Ivoire, have been addressed, with provisions having a favorable impact this year. Dividends have remained attractive for investors, with an average market dividend of around 7%, and several companies offering even higher dividend yields. Companies like Afriland First Bank, Ecobank, and Sonatel have continued to perform well, offering dividend yields above 10% in some cases. While uncertainties remain due to the ongoing health crisis, the midterm outlook for the BRVM market remains positive. As more companies release their first-half results, the full extent of the COVID-19 impact is expected to become clearer in the second quarter. Investors are advised to monitor developments closely and remain cautious in their investment decisions as the market navigates through these unprecedented times.