Yaoundé - 08 July 2020 -

Money Market: CEMAC countries’ fundraising operations soared (+40.2%) and costs skyrocketed (+0.67%) between April 30, 2019, and April 30, 2020

Money Market: CEMAC countries’ fundraising operations soared (+40.2%) and costs skyrocketed (+0.67%) between April 30, 2019, and April 30, 2020
  • Comments   -   Thursday, 25 June 2020 14:11

(Business in Cameroon) - Cemac countries raised CFAF2,996.6 billion on the BEAC money market between April 30, 2019, and April 30, 2020. This is revealed by the securities safekeeping committee CRCT’s (cellule de règlement et de conservation des titres) supervisory board that held this year’s regular meeting via videoconference on June 10. According to the official release published by the CRCT after the meeting, this amount is up 40.2% year-over-year.

In the release, the supervisory board praised the dynamism observed on the said market over the last 3 years. This dynamism, which translated into an ever-increasing number of fundraising operations conducted on the market by the six Cemac countries experiencing cash flow difficulties, has had some impacts on some of the indicators of this market.

This includes investors’ coverage of the various issuance operations. This coverage fell by 31 points to 125.8% at end of April 2020. In short, even though most of the securities issued by Cemac countries were oversubscribed, the oversubscription rate during the period under review fell by 0.31%.  

This somehow shows the over-solicitation of investors who were thus obliged to take some tough decisions to not only abide by the prudential rules in force but also make investments in their best interests.

As a result, remuneration rates on those investments are rising. Indeed, the CRCT's press release reveals, "the average cost of issuances per country has increased by 67 basis points, from 4.81% to 5.48%," over April 2019 to April 2020 period.      

Brice R. Mbodiam

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