FAQ

What is the stock market?

The stock exchange is the meeting place for companies seeking capital to ensure their development (issuers of shares and bonds) and the holders of capital (investors with financing capacity, who subsequently become holders of market products: shares and bonds).

The stock exchange comprises two compartments:

The Primary Market

The companies are issuing their securities for the first time on the primary market.

Institutional investors then subscribe to initial public offerings (IPOs), capital increases (shares), or bond issues (bonds/debt securities). All public limited companies issue shares, but not all are listed on the stock exchange; only the largest or most attractive ones are. This is also the market for new products.

The Secondary Market

These same securities are then offered to savers on the secondary market, which can be considered the second-hand market. The issuer no longer intervenes there.

What is the market?

The market is the unfolding of a trading session.

During this session, the price of a security (share, bond) is determined based on the comparison of the best selling offers and the best buying offers.

What is a share?

A share is a security representing ownership. A share is issued by a corporation that needs to raise capital. Owning a share means owning a portion of that corporation's capital. It grants rights, including the right to vote at shareholder meetings and the right to receive a return: the dividend, paid annually based on the corporation's performance.

What is an obligation?

A bond is a debt security. It represents a portion of a loan taken out by a large company or the government from investors on the financial markets. Holding a bond means lending money to a company or a government. The investor who holds a bond receives interest payments, called "coupons," every year. At the end of the loan's term, the company or government repays the principal. Unlike a share, a bond does not grant rights, such as voting rights.

What are the different sectors within the stock market?

The stock exchange lists companies from the following sectors:

Agriculture
Distribution
Finance
Industry
Public services (Electricity, Water, Telecommunications, etc.)
Transportation
Others

And in terms of obligations, we distinguish:

government bonds
private obligations
regional obligations.

What is the role of brokers: Management and Intermediation Companies (SGI)?

Securities brokerage firms (SGI) are exclusively authorized to act as brokers and clearers of listed securities on behalf of third parties. Consequently, they are authorized to receive and hold funds from the public in connection with this activity.

All transfers of securities listed on the BRVM are carried out through a brokerage firm, except in cases of exemption granted by the BRVM.

Securities brokerage firms (SGI) are authorized to act as securities account holders. However, issuers may hold their own securities on behalf of third parties.

What does stock market brokerage involve?

This is one of the main activities of stockbrokers.

At the Regional Stock Exchange, management companies trade securities daily. They use the market to buy and sell securities (shares and bonds) on behalf of their investors and for their own account.

Why invest in the stock market?

Investing in the stock market is one of the best ways to accumulate wealth. The stock market is the financial market that offers the highest returns over the long term. This is because companies invest using funds raised on the stock market and therefore create wealth. This wealth naturally accrues to the company's owners, the shareholders.

Moreover, stock market investment is reputed to be very discreet, not only because of the confidentiality commitment to which brokerage firms are bound, but also because of the dematerialized nature of securities.

How do I go about it?

To become a good stock market investor, you must, among other things, observe these few recommendations:

To do research means:

Read the business press
consult the BRVM website ( brvm.org ) to have all the information relating to prices, market developments and financial information of listed companies;
Choosing your financial intermediary and being informed about:
- Conditions and fees for opening a securities account
- Costs of stock market transactions
- Advice on products to acquire (depending on the chosen management system)

Following the advice of the SGI, the client must choose one of the following management options:

Self-Directed Management: You have the freedom to manage your portfolio yourself. You make all decisions regarding purchase, sale, subscription, allocation, exchange, rights trading, responses to public takeover bids, sales or exchanges, and subscriptions to units or shares of UCITS funds in your account. We will execute your instructions on the market on your behalf.

Discretionary portfolio management: The purpose of a discretionary portfolio management mandate is to best serve the client's interests. For the management of your assets, the portfolio manager will have the broadest administrative powers. They may carry out all operations related to the purchase, sale, subscription, allocation, exchange, and negotiation of rights, as well as responding to a public tender offer, and subscribing to units or shares of UCITS funds in your account on your behalf.