Foreign exchange market

While traders await the publication of the minutes of a meeting of the American central bank (Fed), which should give indications on its monetary policy, the dollar is weakening against the euro. The foreign exchange market patiently awaits the minutes of the last meeting of the US central bank. The dollar also slipped sharply against the yen and the Swiss franc. At the same time, the euro was boosted by the announcement of the European Central Bank's (ECB) new inflation strategy, which is more cautious than expected. In China, the yuan lost ground against the dollar (-0.27% to 6.4905 yuan).

Cryptocurrencies

The adoption of cryptocurrency is affecting the whole world and finding more and more users in developing countries and regions. Faced with this digital revolution, the parliament of the Economic Community of West African States (ECOWAS) is organizing a relocated meeting under the theme "cryptocurrency as a facilitator of community trade in West Africa", from 6 to July 10, 2021 in Ouagadougou. This meeting aims to enable ECOWAS MPs to gain an understanding of cryptocurrency and its use in the process of facilitating regional integration. The meeting also provides an opportunity for regional parliamentarians to determine the need and nature of regulation to guard against misuse of cryptocurrency in the region.

For its part, the Central Bank of West African States (Bceao) calls on the populations to be vigilant. Through a press release, it informs that cryptocurrencies do not have the characteristics associated with a conventional currency, and the transactions they generate are neither supervised nor controlled by the issuing institution. According to the financial institution, the activity involves significant risks of liquidity, fraud, scam and money laundering associated with participation in these trading platforms.

Money markets

The Nigerien Treasury made a simultaneous obligation this Thursday, July 8, 2021. At the end of this operation, the country collected 60 billion FCFA on the market of the West African Monetary Union (UEMOA). The operation made it possible to retain some 66 billion out of approximately 187 billion offered by investors. Once again on the financial market of the West African Monetary Union (UMOA), the State of Côte d'Ivoire also raised on July 06, 2021 an amount of 33 billion FCFA. It was at the end of its issue by auction of assimilable treasury bills (BAT) with a maturity of 91 days.

Stock markets

At the end of the trading session on Monday, July 5, 2021, the total value of transactions on the Regional Stock Exchange fell to 175.399 million FCFA. But the indices of the BRVM return to the upturn at the end of the week. The stock market capitalization recorded an increase of 21.675 billion FCFA, standing at 4826.344 billion FCFA against 4804.669 billion FCFA the day before. That of bonds, on the other hand, remained stationary at 6775.933 billion FCFA.

According to the Bceao's May 2021 Monthly Statistics Bulletin, international stock market indices maintained their upward momentum at the end of May 2021. "The most significant increases were observed at the level of the Nasdaq Composite (+44.9%), the Standard & Poor's 500 (+38.1%), CAC 40 (+37.3%), Dow Jones (+36.0%), Dax (33.1%), EuroStoxx 50 (+32 .1%) and the Nikkei 225 (+31.9%). On the foreign exchange market, the European currency appreciated over one year against the Japanese yen (+12.2%) and the US dollar (+9.6%). On the other hand, it depreciated against the pound sterling (-4.5%) and the yuan (-2.2%)”, specifies the Bceao.

Raw materials

The market has been shaken since last Thursday by the successive failures of negotiations between the members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies via the OPEC+ agreement, against a backdrop of disagreement between the United Arab Emirates and the rest of the world. group. Investors expected an agreement from OPEC+ members for a production increase of some 400,000 barrels per month until the end of the year. The failure led markets to believe that supply could remain limited for a few months, which briefly pushed prices higher on Tuesday to their highest since 2014.

Nigerian Finance Minister Zainab Ahmed (pictured) announced on July 7 that the federal government is targeting a benchmark crude oil price of $57. This forecast falls within the framework of the 2022 budget and the new production dynamic of 1.88 million barrels per day.

The commodity market remains gloomy on the outlook for the precious metal. While investors are worried about a possible return of inflation, the safe haven par excellence suffered in May its biggest drop since November 2016. Gold remains relatively stable, after a difficult month of June. The price of copper fell over the week as investors bet on higher inflation lessening their bet. Cotton prices were stable this week but remained at high levels, close to the previous annual high reached in February.

For the past four years, organic cotton production has increased every year and returned to its 2019/10 levels. It even slightly exceeds this level with 249,153 tons produced in 2019/20, up 3.9% compared to 2018/19. The latest Textile Exchange Organic Cotton Market Report 2021 highlights that organic cotton is performing at record highs. For 2020/21, Textile Exchange anticipates a 48% rebound in organic cotton production, driven mainly by India and Turkey.

Cameroon is launching a new subsidy window for the cocoa and coffee sectors, endowed with 6.3 billion FCFA in 2021. The Producer Window is the new mechanism that will enable cocoa and/or coffee producers from the various agricultural basins of the country, to get direct access to mass or à la carte government subsidies. Three types of subsidies classified into two main categories are concerned by the Producer Window. The first concerns mass subsidies made up of agricultural inputs. Categories 2 and 3 relate to agricultural equipment and machinery, as well as production support infrastructure.

Companies

CFAO Motors Côte d'Ivoire achieved a net profit of 3.779 billion FCFA as of December 31, 2020, down 28% compared to 2019. Thus, the amount to be distributed to shareholders corresponds to a net dividend per share of 22.15 FCFA against 26.073 FCFA in 2019, a decrease of 3.92 FCFA. The company's turnover had decreased by 4 billion, from 103 billion FCFA in 2019 to 99 billion FCFA during the period under review. The company had also seen its added value drop by one billion, from 14 billion FCFA in 2019 to 13 billion FCFA a year later.

Banks and Insurance

VISTA Bank intends to conquer the WAEMU zone from Burkina (Resp). The VISTA Bank group has acquired the International Bank for Trade and Industry of Burkina (BICIAB). The financial institution aims to work with the government, citizens and Burkinabe businesses by providing them with innovative financial solutions that will contribute to the development of Burkina Faso's economy.

The former boss of UBA Mali and Ecobank Burundi, Alhassane Salif Sissoko, chairs the board of directors of Global Capital. Second of its kind based in Mali, the financial institution endowed with a capital of one billion FCFA (about 1.8 million USD).

In partnership with Togolese fintech SEMOA, Ecobank Group is now giving mobile money users in Togo the ability to bank faster and easier, across the West African Economic and Monetary Union (UEMOA). This thanks to a new digital banking service via Whatsapp called "Express cash by Semoa". The Ecobank Group is the first bank to integrate this type of service into its ATMs and Express Points. The API developed by Semoa creates a totally innovative customer experience and affirms the pioneering role of Open Banking played by the Ecobank Group in Africa.

The Bceao Monthly Statistics Bulletin for the month of May 2021 reveals that at the level of the WAEMU interbank market, the average weekly volume of transactions, all maturities combined, decreased by 12.7% to stand at 433 9 billion in May 2021. According to the Bceao's analysis, the weighted average rate of the said operations stood at 2.59%, against 2.57% the previous month.

In South Africa, the short-term insurance (STI) industry has made record profits during the pandemic. Businesses therefore have no reason to further delay the settlement of all outstanding business interruption claims due to Covid-19. A study by Dr Roelof Botha, economic adviser to Optimum Investment Group, and Keith Lockwood of the Gordon Institute of Business Science, finds that many insurers are slow to pay commercial claims during the pandemic, while others have already executed.

The African Development Bank (AfDB) in partnership with the African Private Sector Assistance Fund has conducted a scoping study on the implementation of NDCs in Africa. The published document identifies opportunities for private sector participation in Africa's climate agenda. Indeed, climate action offers profitable opportunities for the private sector, but will also help protect investments with climate impacts. Thus, governments should be encouraged to consider the private sector as an essential partner for climate action and to create the enabling policy and regulatory environments that enable private sector innovation.

Financial crimes

Financial crimes occupy more space today, because of the resurgence of the risks they pose, their cross-border nature, their consequent damage to the general economic system and their obstacles to the march of development. To prevent and repress these crimes of money laundering and terrorist financing, Morocco has implemented an effective economic criminal policy.

The Senegalese National Assembly voted in emergency procedure the new law on terrorism. According to the Keeper of the Seals and Minister of Justice, Malick Sall, this new regulation confirms the need for Senegal to comply with the provisions of ratified international conventions such as the Financial Action Task Force (FATF).

Regional growth

The Umoa regional financial market (Mfr) completed a quarter of a century on 3 July. Over the past twenty-five (25) years, major reforms have been implemented, in particular the shortening of the settlement/delivery period, the introduction of financial rating on the financial market, the transition from listing to fixing to continuous listing, review of the regulatory framework for collective management, establishment of the mortgage and securitization market, establishment of the third compartment of the Brvm dedicated to SMEs with a minimum share capital required set at ten (10) million FCFA as well as the adoption of a regulatory framework relating to the issuance of green, social and sustainable bonds.

The Interregional Maritime Security Institute (ISMI) has initiated the training of officers from the coastal states of the Gulf of Guinea with the aim of equipping participants to ensure a secure, holy and safe ocean space in which one can easily trade. This training in the management of cases of armed robbery, maritime piracy and illicit trafficking with a view to combating maritime crime is supported by the European Union (EU).

Asylum seekers from Benin, Senegal and Ghana in France will now be able to appeal if their first asylum application is rejected at first instance. And for good reason, the French Council of State has removed these three countries from the list of so-called safe countries of the French Office for the Protection of Refugees and Stateless Persons in France (Ofpra).

As part of the 2021 edition of its budget transparency report, the US State Department took into account 141 countries around the world. 16 African states, including seven from ECOWAS, meet the minimum requirements for fiscal transparency as defined by Washington. Côte d'Ivoire, Togo and Burkina Faso are among these countries.