Banks lead­ing Rwanda’s equities mar­ket growth

Bank of Ki­gali ex­pected to cross-list on Nairobi Se­cu­ri­ties Exchange in De­cem­ber to tap larger EAC mar­ket

The East African - - MAR­KETS - By KABONA ESIARA

Rwanda’s equities mar­ket posted an im­pres­sive turnover be­tween May and Au­gust 2018, as in­vestors sought op­por­tu­ni­ties in the coun­try’s bluechip com­pa­nies.

Listed banks were the big­gest driv­ers of the growth, sig­nalling that in­vestors are grow­ing their stakes in or­der to en­joy growth in the value of their wealth.

Data from Rwanda Stock Exchange shows that the turnover on the equities mar­ket in­creased to $4.6 mil­lion in the May to Au­gust pe­riod, from $2.6 mil­lion recorded be­tween Jan­uary and April.

“There is re­newed in­vestor sen­ti­ment about the Rwanda econ­omy, which has main­tained a strong growth — av­er­ag­ing over 10 per cent in the first half of this year com­pared with the 1.7 per cent recorded in the first half of 2017 — which has in turn lifted the eq­uity mar­ket per­for­mance,” said Ce­lestin Rwabukumba, RSE chief ex­ec­u­tive of­fi­cer.

The big­gest driver of the turnover was Bank of Ki­gali, which gen­er­ated $3.5 mil­lion, 75 per cent of the $4.6 mil­lion the four listed do­mes­tic com­pa­nies, Bank of Ki­gali, I&M Bank Rwanda, Crystal Tele­com and Bralirwa made.

Mar­kets an­a­lysts say the strong re­sults by Bank Ki­gali has been post­ing over the years have trans­lated into high re­turns on in­vest­ment and div­i­dend pay­outs, mak­ing its stock at­trac­tive to in­vestors.

Diane Karu­sisi, the Bank of Ki­gali’s CEO, said an up­com­ing the rights is­sue and crosslist­ing on the Nairobi Se­cu­ri­ties Exchange is partly con­tribut­ing to the pos­i­tive sen­ti­ment. The crosslist­ing in De­cem­ber is meant to tap the larger EAC mar­ket as the bank seeks to raise an ad­di­tional $100 mil­lion to boost its cap­i­tal base and en­able it to fi­nance big card projects.

The I&M Bank Rwanda was also a sought af­ter stock, rak­ing in $1.2 mil­lion in the eight months end­ing Au­gust.

Mar­ket play­ers say the strong re­sults I&M Bank Rwanda has been post­ing and its high re­turns on as­sets and eq­uity makes the bank at­trac­tive to in­vestors.

The bank handed its share­hold­ers a div­i­dend pay­out of Rwf5.16 ($0.006) per share.

The earn­ings per share in­creased from Rwf11.61 ($0.013) to Rwf12.92 ($0.015), a level ex­pected to be main­tained or in­creased given the bank’s strong re­sults in the first half of 2018.

Af­ter a slow start in the first four months end­ing April 2018, ow­ing the reg­u­la­tory fine and tax re­lated mat­ters that wiped out div­i­dends, MTN Rwanda’s growth prospects are now pos­i­tive rais­ing in­vestor con­fi­dence in Crystal Tele­com.

The turnover Crystal Tele­com gen­er­ated grew from $48,792 from Jan­uary to April, 2018 to $651,630 be­tween May and Au­gust.

Mr Rwabukumba said the prospects of the Rwanda bourse are pos­i­tive buoyed by strong eco­nomic growth pro­jec­tions, the monthly re­open­ing of bonds and quar­ter is­suance of new gov­ern­ment se­cu­ri­ties. Ac­cord­ing to Mr Rwabukumba, the gov­ern­ment plans a monthly bond re­open­ing to in­crease liq­uid­ity on the mar­ket, but will also main­tain its quarterly is­suances.

The Na­tional Bank of Rwanda re­ports that the first ever bond re­open­ing was suc­cess­ful, with a re­mark­able sub­scrip­tion level of 311.3 per cent from 42 ap­pli­ca­tions re­ceived from dif­fer­ent cat­e­gories of in­vestors.

Pic­ture: File

The Bank of Ki­gali build­ing.

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