BCEAO releases $ 6 billion for West African economies

The BCEAO has just made a liquidity injection of 3350 billion FCFA ($ 6 billion) at a fixed rate of 2% in favor of several banks of the UMOA. A total of 87 financial institutions participated in the operation. The Central Bank of West African States (BCEAO) made a further injection of liquidity to its member countries last week. In total, 3350 billion FCFA ($ 6 billion) were disbursed by the institution.

During the auction on September 14, 87 banks in the sub-region obtained an injection of liquidity at a fixed rate of 2%. With more than 1000 billion FCFA ($ 1.8 billion), it is the Ivory Coast which obtained the most important financing, ie 31% of the funds injected.

It is followed by Senegal with more than 580 billion FCFA ($ 1 billion), Mali with 466 billion FCFA (835 million $), Benin with 434.5 billion FCFA (777 million $) and Burkina Faso with 318 billion FCFA. ($ 569 million). Niger with 241.6 billion FCFA ($ 432 million), Togo with 219 billion FCFA (…

These hedge funds that profit from the coronavirus

Some alternative funds have taken bearish bets or have bet on an increase in volatility. But like Bridgewater Associates, the biggest name in the industry, most are suffering, despite the promise of returns regardless of market conditions.


He could have won the bet. Just over a week ago, Zhou Wang said he had taken bearish bets in the markets since the emergence of the coronavirus. The first few weeks of the year seemed to prove this Singapore-based hedge fund manager wrong, expecting shares in airlines and hotels to plummet and stocks like Netflix and online gaming companies to rise. All the stock exchanges were pointing upwards, while the virus was already infecting part of China. Then, during his annual visit to Hainan Island for the Chinese New Year, the QQQ Capital official felt comforted in his forecasts: the streets, the shops, the restaurants, everything was empty.

His pessimist earned him a 77% performance over the first two months of the year. The catch? The manager explained to Bloomberg on March 9 that the fall in the markets was now "exaggerated". He therefore decided to pocket his gains, believing on the one hand that the crisis would be less violent than in 2008 - he mentioned that the economy was already picking up in China - and on the other hand that central banks would intervene to contain the stock market panic. It was just before Black Monday that squares collapsed around the world. And before the black Thursday that followed, with an even more violent fall.

Hedge funds better than the market

He was not the only one who initially felt the turn of events on the stock market. Other funds have bet on the decline of certain stocks, the most vulnerable to the economic effects of the spread of the virus. In general, at least until the end of February, long / short strategies (which bet on the rise of certain stocks and the fall of others) have not necessarily made money, but are doing better than the market.

According to the company Eurekahedge, which provides statistics on the performance of the sector, the decline was only 1.6% in February, against 8.4% for the S & P500 and 7.8% for an MSCI index of global stocks . Rarely, more than 90% of managers have managed to beat the market, according to the company. This was the best performance compared since February 2009. Also in January, hedge funds fared better than the stock market indices. It is too early to know if March will be of the same ilk.

"Certain niche strategies have been successful," said Mathilde Franscini, deputy manager for multi-asset institutional management at J. Safra Sarasin. These are for example managers who play on volatility, which has jumped beyond 50 for the first time since the financial crisis of 2008. Certain macro strategies have also been able to get out, depending on the positions taken.

Capitulation on the markets

But not all have the same flair or the same stroke of luck. Dariush Aryeh, chief investment officer of Trocadero Funds, the range of funds managed by Fundana, a Geneva-based company specializing in funds of hedge funds, underlines that "there is everything for managers. It looks like there has been a capitulation since last week. Some are winning by putting themselves in net shorts, especially in global macro, but overall it is, for the moment, a very bad month for equity funds. "

Before adding: "It is still too early to know if the big funds such as Citadel, Millenium, Balyasny and others have managed to save the month, but the first indications make us think that they are also suffering and are in the process of decrease the leverage. " This is the case of the largest hedge fund in the world, Bridgewater Associates, which revealed this weekend to have been caught off guard by the stock market turmoil. Its manager, Ray Dialo, admitted that he did not know how to navigate and did nothing, which resulted in a loss of 20% for the main fund of the company which manages $ 160 billion. "In retrospect, we should have completely reduced the risks," he told the Financial Times.

It’s because the conditions have changed drastically. "The change between a strong start to the year, driven by the economic rebound that was finally appearing, and the massive fall since the end of February, has been brutal," continued Mathilde Franscini. Difficult to adapt to such violent and rapid movements. An inverted “V” shape that caught everyone off guard.

Even in 2008, the fall in the stock market had not been so rapid. In just a few sessions, until last Monday, the major markets lost almost 30%. And the situation did not improve afterwards. Such movements bring the risk that everyone will lose: those who bet on the upside and then lost everything again and those who bet on the downside but started the year very badly.

The few actions that have progressed thanks to the coronavirus

On Friday, Roche shares jumped nearly 5% in the morning after the announcement that the US authorities had authorized an emergency test developed by the Basel pharmaceutical group. Pharma stocks were then in the forefront of the Swiss stock market, in a buoyant market in the aftermath of a dark day (-9.6% for the SMI). This episode shows that, despite the passage of stock markets in the bear market, companies have recorded good progress in the past two weeks. In the United States, we can cite biotechnology players such as Gilead Sciences or Moderna Therapeutics, the manufacturer of protective clothing Lakeland Industries or even the specialist in video conferences Zoom. Their progression was marked between February 20 and March 6, before generally undergoing a decline.

Because over the past week, it's more difficult to identify winners. In Switzerland, two of the three best stocks over this period were penny stocks, Perfect Holding (services to the aeronautical industry) and Relief Therapeutics. The price of the latter doubled on Wednesday, March 11, after the announcement that an additional study would be launched for a future drug against respiratory problems, the main cause of deaths linked to Covid-19. After this mad flight, the title was worth 0.8 cents on Friday morning. Third-place winner in the Swiss market in the past week, biochemist Bachem posted a weekly gain of around 2% late Friday morning. No connection with the coronavirus this time. S. R.