The value of the Nestlé CI shares jumped by 7.23% on the Abidjan-based regional stock market BRVM yesterday May 5. This is the seventh consecutive day of trading which closed with an increase of more than 7%, according to data collected by Ecofin Agency. Since January 1, 2021, its progression has increased to 293% and 500%, compared to its value 12 months ago.

The second top performer on BRVM is Société ivoirienne des tabacs (SITAB), which has risen by 143% since the beginning of 2021. The third company is the Société Multinationale de Bitume, which has risen by 109%.

Nestlé CI's progress is like the realization of the obvious. When it announced its FY2020 results on April 21, its net profit was 1.5 times its market value at the time. Also, its proposed dividend (CFA363.6 /share) gave a yield of 58.7% for those who invested in it at that time.

The low volume of the company’s traded shares shows that investors who already had them in their investment portfolios are waiting for the moment when they will realize their gains. The growth outlook for the stock remains strong, at least in the medium term. For Q1 2021, Nestlé CI announced a net profit of CFA4 billion, up 893% from the same period in 2020.

While the growth pace can slow down in the coming quarters, the upside remains solid. At its May 5 price of CFA1,260, its dividend yield was 29%. This margin is still comfortable, given the BRVM average of 12.4% for investors and a market yield of 7.7%.

However, despite this investor enthusiasm, Nestlé CI's best month since 2016 was January 2021, when its share price rose by 115.6%. Since the beginning of May, it is up only 23.5%, after a 64.2% improvement in April 2021.

Idriss Linge