(Business in Cameroon) - The most recent Monetary Policy Report from the Central Bank of Central African States (BEAC), released in March 2024, indicates a substantial surge in stock market activity across the CEMAC zone throughout 2023. Last year, the market capitalization of the Douala-based regional stock market, the Central African Securities Exchange (BVMAC), increased by 36.8% year-on-year. This indicator, representing the total financial value of tradable securities, reached CFA1,562.9 billion as of December 31, 2023.

"This situation is mainly attributable to the listing of new securities and the appreciation of certain stocks," explains the document released by the central bank. In addition to the rise in the value of some securities, activity on the BVMAC was marked, between 2022 and 2023, by the listing of several new bonds and stocks. This includes the Gabonese government bonds "EOG 6.25% Net 2022-2028" and shares of the Gabonese Commercial Reinsurance Company (SCG-Ré), both listed on January 26, 2023. With respective values of CFA175 billion and CFA5 billion, these Gabonese securities increased BVMAC's market capitalization by CFA180 billion in 2023.

Furthermore, on February 15, 2023, the 2022-2029 bond issue of the Development Bank of Central African States (BDEAC) was listed on the BVMAC, increasing the market capitalization by CFA110 billion. At the same time, during the trading session on May 29, 2023, there was a 17% increase in the number of shares listed on the BVMAC by Cameroonian banker La Régionale, from 61,630 to 72,089 shares. This increase, which contributed to BVMAC's market capitalization, resulted from the listing of 10,459 new bank ownership shares, following a free distribution operation to stock market shareholders in April 2023.

On November 23, 2023, the Cameroonian government boosted the bond compartment of the BVMAC by over CFA176 billion, with the listing of its first multiple-tranche bond issue, closed in June 2023. However, despite the growing dynamism of activities at BVMAC, this financial market remains far from the expectations expressed by community authorities under the market revitalization plan. For instance, the performance in 2023 falls short of the minimum stock market capitalization targets of CFA1,200 billion for the equity segment and CFA1,000 billion for the bond segment (a total capitalization of CFA2,500 billion).

These projections were based on the effective listing of 10 new state-owned companies proposed by all CEMAC countries, as per a commitment made in 2019. However, despite the completion of the proposed companies list several months ago, with an additional five companies, very few of them have crossed the threshold to the stock market. Moreover, beyond the delay in the arrival of the aforementioned companies on the BVMAC, the CEMAC financial market faces fierce competition from the Central Bank's public securities market.

" Overall, BVMAC operated in an economic context marked by increased competition from the money market conducted by BEAC, which captured most of the funds raised by sovereigns (States), thus creating an unprecedented dynamic on the public securities market administered by BEAC and governed by the auction system for fungible treasury bills and bonds", BVMAC points out in its 2021 activity report. In 2023, and even in 2024, this market rivalry has not diminished.

According to central bank data, as of January 31, 2024, the outstanding public securities issued by CEMAC states on the BEAC public securities market amount to CFA6,408.5 billion, up by 17.1% compared to the same period in 2023. This is despite the increase in operation costs during the period. To explain this growing preference of states for the money market, as opposed to the financial market, experts and capital market actors cite reasons such as cost competitiveness, flexibility, and even simple orthodoxy. The latter suggests that, according to financiers, the public securities market is the traditional market for national treasuries, while the financial market targets businesses.