Weekly Market Pulse: Sonatel Leads BRVM Gains

BRVM Stock Market Update for September 9-13, 2024.

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The BRVM stock market maintained its upward momentum for the fourth consecutive week, driven by key performers in the telecommunications and banking sectors.

Despite a greater number of falling stocks (25) compared to rising ones (13), the BRVM Composite Index rose by 0.76%, reaching 261.24 points, a level not seen in almost seven years.

The BRVM 30 index also climbed 0.88% to 131.15 points, while the BRVM Prestige index inched up 0.07%, settling at 126.56 points.

Sonatel Dominates Market Activity

Telecom giant Sonatel (SNTS) was the primary driver of market gains, rising by 4.58% to reach 24,000 FCFA.

With a weekly capitalization increase of 105 billion FCFA, Sonatel continues to solidify its position as the BRVM’s largest stock, with a total market value of 2,400 billion FCFA. The company’s robust performance helped lift the BRVM Composite index above the 260-point threshold, a milestone not reached since July 2017.

Orange CI also contributed to market growth, increasing by 1.01% to 14,950 FCFA and adding 22.60 billion FCFA in value.

However, the week wasn’t as favorable for Onatel BF, which posted the largest loss in market capitalization, dropping 10.78% to 2,400 FCFA and erasing 19.72 billion FCFA in value.

Onatel’s decline follows the release of its half-year financial results, which revealed a 16.4% decrease in profit, down to 9.33 billion FCFA from 11.16 billion FCFA the previous year.

Setao’s Rebound and Other Key Performers

One of the standout recoveries this week was Setao, which bounced back from a 5.11% decline in the previous week, rising by 7.69% to 700 FCFA. This rebound, fueled by renewed investor interest, placed Setao at the top of the weekly performers.

Tractafric Motors CI also showed a notable recovery, climbing 6.19% to 2,400 FCFA after a significant drop of 13.08% the prior week. Other strong performers include Alios Finance, which rose 6.02% to 880 FCFA, Sucrivoire (+5.61% to 565 FCFA), and BOA Mali (+4.86% to 1,835 FCFA).

BOA Niger Suffers Significant Decline

Despite its gains in the previous week, BOA Niger experienced a sharp decline, falling by 11.69% to 3,400 FCFA. This dramatic loss came after the bank’s stock was flagged as overbought, leading to a selloff that placed it among the worst performers of the week.

Onatel BF Faces Additional Pressure

Adding to its woes, Onatel BF faced further pressure after its half-year earnings report showed a sharp decline in net profit, primarily due to rising energy costs and operational challenges.

This led to a 10.78% fall in the company’s stock price, bringing it down to 2,400 FCFA. Onatel was followed by other notable losers, including Nei-ceda (-7.69% to 720 FCFA), Oragroup (-6.85% to 1,700 FCFA), and Air Liquide (-6.72% to 555 FCFA).

Market Activity Overview

Investor activity for the week reached 3.29 billion FCFA, representing a slight decline of 4.36% compared to the previous week. Sonatel once again led the trading volume, accounting for 33.5% of total activity with transactions amounting to 1.10 billion FCFA.

Other major contributors included Orange CI, with 263.82 million FCFA in trades, and Société Générale CI, which traded 222 million FCFA.

Market Outlook

As the BRVM continues to rise, driven by key players in telecom and banking, the market shows signs of resilience despite fluctuations in some sectors.

The continued strength of stocks like Sonatel and Orange CI suggests ongoing investor confidence, though weaker sectors like agriculture and energy may face challenges.

For the coming weeks, all eyes will be on companies like Onatel BF, which are under pressure due to disappointing financial results, as well as any changes in trading activity across the broader market.

The upcoming resumption of trading in Solibra shares, due to the company’s share split, may also generate increased market activity. Solibra’s share price has been divided by ten, from 2,500 FCFA to 250 FCFA, which could attract more retail investors and enhance liquidity.