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IVORY COAST KENYA
Ivory Coast has an open economy, with foreign trade in cocoa,
coconuts, bananas and fish accounting for half of its GDP. While
that hit the economy hard in 2011, when the commodities price
boom turned to bust – a crash accentuated by a contemporane-
ous outbreak of armed conflict – it has also enabled the national
income to increase at an annual compound rate of more than 7%
in the subsequent seven years. The long-term opportunity here
is still seen to lie in regional integration of both the financial and
trading networks of west Africa. The Ivorian capital is host to
the Bourse Régionale des Valeurs Mobilières (BRVM), which is
the securities market counterpart to the West African Monetary
Union (WAMU). There are plans afoot, co-ordinated by the
African Securities Exchanges Association (ASEA), to enhance
liquidity still further by linking the BRVM to exchanges in Cairo,
Casablanca, Johannesburg, Lagos, Mauritius and Nairobi. So
far, however, the WAMU has tended to put fiscal policy and
exchange rate policy into commission without doing much for
intra-regional trade. It remains to be seen if exchanges can do
better. It was a difficult year in the Kenyan securities markets. On the
stock market the NSE20 has struggled since the highs of 2015,
initially because of the political uncertainty caused by the dis-
puted presidential election, but latterly as a result of the with-
drawal of bank credit and the collapse of some household name
retailers. It is the sustained withdrawal of foreign investors in
particular which has made life increasingly difficult for the
sub-custodians over the last two years. After all, foreign inves-
tors made handsome returns in Kenya between 2009 and 2017.
In fact, the MSCI Kenya index substantially outperformed the
MSCI Frontier Market index – of which it is a part – throughout
most of that time. The M-Akiba mobile telephone bond offer last
year was not the success with domestic investors its promoters
had hoped, but the Kenyan central securities depository, Central
Depository and Settlement Corporation (CSDC), proved it could
support innovations of that kind. It is looking at the contribution
a shorter settlement timetable and securities lending and bor-
rowing could make to liquidity. An interesting test for CSDC will
come with the much-delayed launch of the Nairobi Securities
Exchange derivatives market (NEXT), with its planned clearing
house.
Société Générale Securities Services
The French bank, which has a sizeable country network in Afri-
ca, operates here through the local subsidiary of the group. One
client applauds his local relationship manager for being “very
pro-active” and offering both “strong support” and “experience
of the market.” But SGSS has not attracted any meaningful re-
sponses this year, making it difficult to assess even the reception
given to the new, fully SWIFT-compliant technology platform
the bank has installed in Abidjan.
Standard Chartered Bank
Although Standard Chartered did not collect many responses
here, the overall average score is much improved on that of 2018.
Ivory Coast represents a rare foray into francophone Africa by
Standard Chartered. It has offered consumer and corporate
banking services in Ivory Coast since 2001 and securities servic-
es for the wider WAEMU region since 2012.
Standard Chartered Bank
This was not a vintage year for Standard Chartered in Nairobi.
Standard Chartered has seen its performance in this survey
decline amid concerns about increased risk and a lack of com-
munication with clients. It has nevertheless outperformed the
market average in most areas and has recorded scored above 6.0
for account management and regulation and compliance.
Standard Bank
The Nairobi operation of the Johannesburg-based regional
custodian has also experienced a decline in scores. However, the
outcome is narrowly based as the bank did not receive enough
responses to be judged soundly here. The detail, which is not
extensive, suggests client concerns are focused primarily on
pricing.
Spring 2019
globalcustodian.com
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