Portfolio Managers’ Inertia towards published information: The Case of Intermediation Companies on the West African Regional Stock Exchange

Abstract

Purpose: This paper investigates the portfolio managers’ behavior in the Regional Stock Exchange (BRVM) of the West African Economic and Monetary Union (WAEMU).

Design/Methodology/Approach: This is field survey of a population of 22 intermediation companies (and responses obtained from 11 fund managers) using a questionnaire and Likert-scale type questions.

Findings: The results show that companies listed on the Regional Stock Exchange do not communicate sufficiently. The results also identify two (2) major profiles (styles) in the behavior of portfolio managers working in intermediation companies: a lack of information from listed companies and an inertia of portfolio managers toward information disseminated on the market.

Implication: As part of their investment decision, a greater portion of the portfolio managers of the management and intermediation companies focus more on the publication of information as regards to the financial health and performance of the company publishing it, and pay less attention to the company’s capacity for innovation and its mode of governance as well. They are relatively indifferent regarding the information based on the company’s business sector and the performance of its stock market shares and its financial communication, but they favor it more than the information based on the capacity for innovation and the mode of governance.

Originality: The results are the first to offer a portrait of the behavior of portfolio managers in management and intermediation companies of the Regional Stock Exchange.