(Ecofin Agency) - In 2022, the BRVM stock market experienced a 24.2% increase in market capitalization. When combined with a 7.7% net dividend yield, this represents a total gain of 34.28% for investors. However, sustaining this performance may be challenging.

Thirty four companies listed on the WAEMU regional stock market BRVM have already announced CFA585.2 billion in net dividends for FY2022. When compared to the market capitalization as of December 31, 2022, which stood at about CFA7,561.7 billion, this yields a total return of 7.77% for investors.

The BRVM's market capitalization at the end of 2022 had gained 24.2%, according to data compiled by Ecofin Agency. Cumulatively, this provided BRVM investors with a 34.28% return on investment. Even when adjusted for inflation and the negative impact of exchange rates, the BRVM remained an attractive option for investors interested in equities.

However, this overall performance hides some disparities. Some companies, particularly those affiliated with the telecommunications group Orange, significantly contributed to the increase in the volume of dividends distributed. Others, such as Palm Ci or Société des Caoutchoucs de Grand-Béréby, excelled in terms of dividend yields, with respective values of 15.7% and 15.2%.

A cross-analysis of the data reveals that this wealth created on the BRVM does not necessarily benefit the local savings of the West African Economic and Monetary Union (WAEMU). While the Ivorian government imposes a 15% tax on the gross dividend declared by companies, the portion of the stock market float in the distributed dividend is only 26.34%. Excluding very minority public or local holdings, a significant portion of this dividend is drained out of the WAEMU economy.

The strong presence of foreign investors makes BRVM's performance dynamics vulnerable to potential external or internal shocks. Indeed, foreign investors tend to reallocate their capital to safer and more profitable markets when necessary. Furthermore, the stock market capitalization has shown an average annual growth rate of 23.17% over the past three years, although the growth rate has slowed down.

If this market were to maintain this rate of market capitalization growth with a 7.7% yield by 2026, listed companies would need to distribute net dividends reaching CFA1,100 billion by the end of that year.