(News Bulletin 247) – These three securities are moving down sharply on the Paris Stock Exchange, following the claim of a takeover of power in the country by the military.

The stock market and (geo)politics are closely linked. The fall in values ​​exposed to Russia when Moscow’s invasion of Ukraine was first suspected and then confirmed demonstrated this very well last year.

This Wednesday, the political situation in Gabon is shaking up several shares on the Paris Stock Exchange. Ali Bongo, the country’s outgoing president, claimed victory in the presidential election overnight from Tuesday to Wednesday, with 67.24% of the vote.

But in the process, soldiers announced to “end the regime” of Ali Bongo in the country, thus attempting to carry out a coup. Ali Bongo’s fate is not yet known at this stage.

Gabon is a country rich in oil and natural resources. Consequently, several French listed groups are present.

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Maurel & Prom poised to strengthen its position in the country

This is the case of the independent oil company Maurel & Prom, whose share price plunged 22.4% around 10:40 a.m. on the Paris Stock Exchange. It is even the most important country for French business. To give an idea, Maurel & Prom’s oil production in Gabon represented 15,779 barrels per day in the first half of 2023, i.e. more than half of its total hydrocarbon production, i.e. 27,400 barrels of oil equivalent per day.

Contacted by News Bulletin 247, the group declared that its operations were absolutely not affected at present and did not wish to comment further.

Oil production does not stop suddenly. They should have time to continue production before the next deliveries of barrels”, underlines Nicolas Montel, analyst at Portzamparc.

This political crisis in Gabon comes as Maurel & Prom announced two weeks ago the plan to buy the Gabonese company Assala Energy Holdings for 730 million dollars. This operation, which requires the agreement of the Republic of Gabon, should significantly strengthen the French group in Gabon. Assuming that Assala had been integrated into its accounts, Maurel & Prom’s total production would have risen to 56,500 barrels per day in the country in the first half.

Eramet operates the largest manganese mine in the world there.

The mining Eramet also suffers with a plunge of 21.6%. The company is present in Gabon through its subsidiary Comilog (Compagnie Miniere de l’Ogooué) which it owns at more than 63% and which operates a manganese deposit in Moanda, which would be “the first manganese mine in the world”, according to Eramet. This mine produced 7.5 million tons of manganese ore last year and Eramet achieved overall sales of 3.15 billion euros in manganese.

The company told news agencies it had halted its operations in Gabon, where it employs around 8,000 people, following news of the coup in the country.

“Eramet is going to suspend its production and produce less ore, which will affect its turnover and its Ebitda (gross operating profit). But Eramet is such a major player in manganese that when it interrupts its production, prices ore are rising, which somewhat offsets the production stoppage. Everything will nevertheless depend on the duration of this stoppage, “says Nicolas Montel.

Note in passing that the Eramet share could potentially also be penalized by Fitch, the rating agency which lowered the outlook for the mining company’s “BB+” credit rating to “negative”.

Another company to suffer from the political uncertainty in Gabon: Total Gabon, which fell by 14%. This company is 58.3% owned by the oil major TotalEnergies (which for its part gains 0.4%) and 25% by the Gabonese Republic, the balance constituting the free float of the share.

Last year, Total Gabon produced 15,800 barrels per day of crude oil. A drop of water in comparison with the total hydrocarbon production of TotalEnergies, of 2.77 million barrels of oil equivalent per day in 2022.

Despite the fall in these shares, Nicolas Montel wants to be measured. “Historically, when there are coups in Africa, new governments do not touch mining and oil assets because they are aware that they represent an important source of income and foreign currency, which is therefore used for the activity economic. I have no worries about a risk of nationalization of these assets”, considers the analyst.

“Afterwards, we will also have to see how serious these soldiers are when the situation seems very confused at the moment,” he warns.