Investors on the regional stock exchange serving eight West African nations are increasingly favouring equities over bonds, as a strong rally in share prices contrasts with a near-stagnant secondary debt market.
Data from the Bourse Régionale des Valeurs Mobilières (BRVM) showed that shares worth about 170 billion CFA francs (US$280 million) were traded during the first half of 2026, compared with just 4.3 billion CFA francs (US$7 million) in bond transactions through June 19.
The disparity highlights a shift in investor appetite as stocks deliver stronger returns in a region where inflation remains relatively subdued under the CFA franc’s peg to the euro.
The BRVM Composite Index has gained around 28 percent since January, while the exchange’s blue-chip and Prestige indices rose approximately 25 percent and 20 percent respectively.
The rally has been underpinned by improving corporate earnings. Combined net profits of the exchange’s 47 listed companies more than doubled between 2020 and 2025, reaching about $2.8 billion, according to company financial statements.
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Banks accounted for nearly half of those profits, reinforcing their dominant role in the region’s financial system.
Strong earnings have translated into generous shareholder returns. Listed firms distributed roughly two-thirds of their profits as dividends, with telecom giant Sonatel leading payouts. Several banks in Côte d’Ivoire and Benin also delivered sizeable dividends to investors.
However, analysts caution that high payout ratios could limit the ability of some firms to build reserves. One lender, Bank of Africa Benin, paid out more than it earned in 2025, drawing on existing reserves to maintain shareholder distributions.
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While equities have flourished, the bond market has struggled to attract activity after issuance. Trading on the secondary market remains thin, with a single bond issued by banking group Oragroup accounting for around one-fifth of all bond transactions.
Government borrowing, meanwhile, has increasingly shifted away from the BRVM toward UMOA-Titres, the regional institution that manages treasury auctions under the supervision of the Banque Centrale des États de l’Afrique de l’Ouest (BCEAO).
The scale of those auctions far exceeds activity on the exchange’s bond market. During a four-day period in April alone, four governments raised 371 billion CFA francs ($610 million), reflecting strong investor demand for newly issued sovereign debt.
Regional banks play a central role in both markets, generating much of the profit driving equity valuations while also serving as major purchasers of government securities.
That interdependence creates opportunities but also risks. Analysts note that banks’ growing exposure to sovereign debt could leave them vulnerable should governments face fiscal difficulties.
Borrowing costs already vary significantly across the region. In April, Niger paid more than 10 percent on three-year debt, compared with between 6 and 7 percent for Côte d’Ivoire, reflecting differing perceptions of political and financial risk.
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Military-led governments in Niger, Mali and Burkina Faso have become increasingly dependent on regional capital markets as access to external financing has narrowed.
Market participants will now be watching whether corporate earnings can continue to justify rising stock valuations and whether governments can manage a wave of bond maturities due in 2026.
The prospect of major new listings, including a possible flotation of the Nigerian oil refinery owned by African billionaire Aliko Dangote, could provide a further test of investor appetite and the depth of the region’s capital markets.
