Rwanda Stock Exchange Eyes Three New IPOs In 2016

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Written by Kevin Mwanza

Rwanda Stock Exchange (RSE) is off to a promising start with three new initial public offers (IPOs) expected in the Finance, Logistic, and transport sectors.

This will increase the number of trading companies on the nascent Rwandan bourse to 10.

“We expect three initial public offerings this year,” Chief Executive Officer Pierre Celestin Rwabukumba said told Bloomberg. “Due to disclosure restrictions I cannot tell you which ones.”

According to CNBC Africa, the tiny East African nation saw $45.5 million worth of trade recorded at the stock exchange in the last quarter of 2015, a record for RSE.

Dealmakers involved in arranging the three IPOs said they could not disclose the identity of the companies until they acquired regulatory approval.

They however disclosed that they are a bank where a principal investor is liquidating interests in order to venture into other businesses and a transport company that is seeking to fund acquisition of a modern fleet. A third company involved in logistics is looking for expansion capital.

Rwabukumba said the country’s bourse was optimistic regarding the future.

“For this year we are planning to have few listings coming into the market.  We are focusing a lot on the demand side with specific attention on retail investors,” he said.

“We are increasingly getting more and more new investors; in 2015 we had a surge of new investors of 19.2 per cent. We are to keep building on this momentum to entice new investment so that we don’t face challenges in supply and demand sides.”

Analysts said the Rwandan exchange has remained resilient despite the political dark cloud that has been cast by President Paul Kagame’s indication that he will contest for a third term in office after the constitution was changed in December to allow him to do so.

The change could see him rule until 2036.

“2016 should witness increased market capitalization, liquidity and turnover largely driven by new listings. We believe the Rwanda Stock Exchange offers a bargain hunting ground for foreign investors helped by a very strong dollar,” Davis Gathaara, managing director at Baraka Capital, told The East African.