Rwanda Stock Exchange eyes five listings by 2014

NAIROBI  - The Rwandan bourse is eyeing at least five new listings by 2014 as the government sells investments in major state-owned firms in a bid to boost the nascent stock exchange, its top official told Reuters on Monday.

The land-locked central African nation of 11 million people listed its first two Rwandan companies this year: brewer Bralirwa and the country's biggest bank by assets, Bank of Kigali.

Both offers were heavily oversubscribed and analysts attributed their success to cheap valuations, good economic fundamentals and political stability.

"We've a pool of (listings) coming, and we are looking at the most attractive and the most prepared ones first," Robert Mathu, chief executive officer at the Rwanda Stock Exchange, told Reuters in an interview.

"We have a target of five companies in the next three years. All are government-related investments," he said.

It is estimated that about 20 companies could be up for sale to the public by the Rwandan government.

The government plans to sell a 20 percent stake in Rwanda's biggest insurer Sonarwa (Societe Nouvelle d'Assurance du Rwanda), in which Nigerian firm IGI owns a 35 percent stake, as well as its stake in telecom operator MTN Rwanda, a unit of South Africa's MTN Group.

Mathu said they also expect other regional companies to help deepen activity on the Rwandan bourse as they cross-list.

EAST AFRICAN RETAIL INVESTORS

Kenya Commercial Bank, the region's biggest bank by assets, and leading media firm Nation Media Group have already cross-listed on the Rwanda Stock Exchange.

Others that are expected to cross-list include hotel chain TPS Eastern Africa, Kenya Airways, one of Africa's leading airlines and Equity Bank, the biggest bank by market capitalisation in Kenya.

"The companies lined up are from the banking, cement, telephony services and insurance sectors," said Mathu, adding they were working on ways to make it easier for east Africans outside Rwanda to invest in these offers as domestic investors.

According to the east African common market protocol, there should be free movement of capital, services and recognition of service providers across the member states of Kenya, Uganda, Tanzania, Rwanda and Burundi. However, the protocol has not been implemented across the board as yet.

Mathu said the exchange was working with leading commercial banks to develop a system whereby retail investors would pay for new shares after they were allotted to avoid potential losses due to currency exposure.

At the moment, only institutional investors are allowed to pay for their shares after allotment in east Africa.

East African currencies have been under pressure for most of this year, hitting a series of all-time lows, mainly due to imported inflation spurred by high oil prices.

"We want to come up with a system where banks will guarantee (retail) investors payments so that they can pay after allotment and mitigate on currency exposures," said Mathu.

Source: Reuters