{"id":457688,"date":"2018-02-01T12:45:13","date_gmt":"2018-02-01T12:45:13","guid":{"rendered":"https:\/\/www.financialafrik.com\/?p=457688"},"modified":"2018-02-01T12:45:13","modified_gmt":"2018-02-01T12:45:13","slug":"krach-or-simple-correction-to-the-brvm-2th-part-analysis-of-2017-sectors-and-2018-perspectives","status":"publish","type":"post","link":"https:\/\/www.financialafrik.com\/en\/2018\/02\/01\/krach-or-simple-correction-to-the-brvm-2th-part-analysis-of-2017-sectors-and-2018-perspectives\/","title":{"rendered":"Krach or simple correction to the BRVM? (2th part): Analysis of 2017 sectors and 2018 perspectives"},"content":{"rendered":"
<\/div>

By<\/strong>Daniel Aggre, Managing Director and Founder of Sikadvisory and<\/strong>Ahmed Diallo (Financial Analyst)<\/strong><\/p>\n

\n

After analyzing the\u00a0different events that influenced the BRVM in 2017<\/a>,\u00a0<\/strong>les\u00a0\u00a0<\/strong>In this second part, experts discuss a sectoral reading of the BRVM as well as the decoding of the evolution of the companies that have been the stars throughout the year. The 3th part focuses, it, on the perspectives of the year 2018.<\/span><\/p>\n

Evolution of the BRVM by sector of activity<\/strong><\/p>\n

\"\"<\/a><\/p>\n

BRVM Distribution: 43.34% decrease in 2017<\/strong><\/p>\n

Since the end of the post-electoral crisis in C\u00f4te d’Ivoire, it has been the second sector that has made the most progress at the BRVM. From 2011 to 2016, BRVM Distribution recorded a cumulative growth of 313.67%. Also at the date of 30 \/ 12 \/ 2016, BRVM Distribution had the highest price earning ratio (PER) of the BRVM, ie an average 33.03 PER.<\/p>\n

On the other hand, companies in this sector distributed dividends\u00a0[1]<\/sup><\/a>\u00a0less important than the previous year to their shareholders. Let 20.42 billion FCFA in 2016 against 21.02 billion FCFA in 2015.<\/p>\n

Hypothesis<\/strong>: Such a pricey PER already reflected a very high expectation of investors. Unfortunately the country’s security situation at the beginning of the year and the publication of dividends were perceived as a bad signal by investors who preferred to change their strategy and exit their positions.<\/p>\n

 <\/p>\n

BRVM INDUSTRY: 34.97% decrease in 2017<\/strong><\/p>\n

This is one of the least profitable sectors of the BRVM. And for good reason, the companies that compose it, are the ones that have suffered the most assault of competition these 7 last years. We can mention the case of SOLIBRA Vs BRASSIVOIRE. When it is not unfair competition through counterfeit and cheap imported products in the case of UNIWAX, UNILEVER or NESTLE.<\/p>\n

It should be noted that five (5) companies on 11 covering this sector have announced a decrease in their net results when the 2017 half-yearly results are published.<\/p>\n

Hypothesis :\u00a0<\/strong>With five (5) companies in the same sector announcing downward results and very aggressive competitors, this sector has not provided enough evidence of stability to reassure investors. Especially in a year so hectic.<\/p>\n

 <\/p>\n

BRVM TRANSPORT: 15.99% decrease in 2017<\/strong><\/p>\n

Despite the good results of Bollor\u00e9 (+ 38% of the net result in the third quarter), the stock has recorded a fall in the share price of nearly 16%. The security situation in the country has been a major factor for investors. These have anticipated a decline in the company’s activity by leaving rather their positions. Thus, Bollor\u00e9 lost about 33% of the price of his action at 1er<\/sup>\u00a02017 semester.<\/p>\n

Port activity being strongly correlated with economic and political activity, the share price was hostage to the perception that investors had about the damage caused by social unrest on the company’s activity. Thus, the action BOLLORE seems to best reflect the psychology of investors throughout the year.<\/p>\n

In a graphical representation (below), we will find that there is no difference between the BOLLORE share price and its index. Indeed, Bollor\u00e9 is the flagship action that influences this sector, MOVIS having low transaction volume.<\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

BRVM AGRICULTURE: 15.64% decrease in 2017<\/strong><\/p>\n

Agriculture has been one of the most resilient sectors of the BRVM with two (2) companies finishing in the green. This feat is mainly due to the soaring prices of the international market of rubber and palm oil. They constituted a bulwark with the downward trend of the BRVM.<\/p>\n

Unfortunately this sector has been hit hard, the lack of visibility and communication of SICOR and SUCRIVOIRE. Indeed, since the publication of SICOR’s annual 2016 results, the company has not made any communication about its activities. Like SUCRIVOIRE, who suffered from a bad image since his OPV.<\/p>\n

\u00a0<\/strong><\/p>\n

BRVM PUBLIC SERVICE: 10.86% decrease in 2017<\/strong><\/p>\n

The public service sector was severely impacted by the publication of the half-yearly results of the CIE-SODECI binomial. A decrease of 83% of the net profit of the CIE in the first half and a fall of 3% for the SODECI.<\/p>\n

These two companies have pulled the whole sector down. Fortunately, SONATEL, which continues to be the safe haven of the market, has cushioned the downturn in this sector.<\/p>\n

\"\"<\/a>
The public service index is guided by the SONATEL title in red.<\/figcaption><\/figure>\n

 <\/p>\n

BRVM FINANCE: 10.46% decrease in 2017<\/strong><\/p>\n

The finance sector was the most dynamic sector in 2017, thanks to two OPVs. Those of NSIA BANK and ECOBANK CI. Although it has outperformed the main index, the finance sector still fell by almost 10%. It should be noted that the 2 BALE 3 AND 2018 regulations coming into force in XNUMX will force banks to put more of their own funds in reserve. This regulation pushes them to prepare.<\/p>\n

This has had an impact on the distribution of their dividends (see historic comparative table). Such a decision, of course, does not please investors).<\/p>\n

\"\"<\/a><\/p>\n

BRVM FINANCE: 10.46% decrease in 2017<\/strong><\/p>\n

The finance sector was the most dynamic sector in 2017, thanks to two OPVs. Those of NSIA BANK and ECOBANK CI. Although it has outperformed the main index, the finance sector still fell by almost 10%. It should be noted that the 2 BALE 3 AND 2018 regulations coming into force, will force banks to put more of their own funds in reserve. This regulation pushes them to prepare.<\/p>\n

This has had an impact on the distribution of their dividends (see historic comparative table). Such a decision, of course, does not please investors.<\/p>\n

 <\/p>\n

The performance of the main companies during the year<\/strong><\/p>\n