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At 5 years, the Rwanda Stock Exchange is slowly becoming Rwanda’s platform of choice for development capital



The past five years have seen the Rwanda Stock Exchange (RSE) grow from a nascent stock market to one that is contending to become Rwanda’s platform of choice for development capital and much more.


So why list on RSE?

Celestin Rwabukumba, the RSE Chief Executive Officer says the bourse provides an avenue for local and regional firms to raise long-term development capital that is not costly.

He argues that most of the products provided by the commercial banks are short-term and expensive, which affects the borrower’s ability to expand.

There are currently seven firms listed on the RSE, three local firms – Bank of Kigali, Bralirwa, and Crystal Telecom – and four cross-listed counters, Kenya’s Nation Media Group, Uchumi Supermarkets, KCB, and Equity Bank.

There are also a host of Treasury Bonds the government issued under its quarterly issuance program to raise funds for infrastructure and capital market development.

Over the past two years, government increased the drive aimed at attracting Rwandans to use the local bourse as an investment vehicle and an avenue for firms to raise affordable development finance through public offerings.

The TB issuances and Initial Public Offerings (IPOs) have all been oversubscribed showing that the bourse presents businesses immense opportunities to mobilise funds.

“The debt market is deepening in that more companies are showing interest in commercial papers among other products we are introducing,” noted Rwabukumba.

He said they are also talking to different stakeholders about Real Estate Investment Trusts (REITs). “In the next few months, we want to be fully automated, very efficient and increase the number of listed companies because we want to be a big player to the economy.

As per this year’s African Stock Exchanges Association (ASEA) theme, ‘We need to stay relevant to the real economy’,” Rwabukumba explained.

Rwabukumba said they want to be the main choice for businesses to raise long term capital. People need to shift from going to the banks for long term finance and come to the stock market because it is cheaper, long term and easier to get.

Automating the RSE

Rwabukumba said the bourse would switch from the current manual trading platform to an automated platform in the next couple of months. This will be a huge move for the RSE whose central securities depository is the only automated infrastructure. “We are looking to automate our trading platform, but we have automated settlement. Only the trading platform is still manual as of now.”

The Nairobi Securities Exchange, the Uganda Securities Exchange and the Dar es Salaam Stock Exchange all have automated trading platforms. The local exchange is just over five years old, having started in January 2011, but its central depository (e-share file) was fully automated from the beginning. Rwabukumba says the initiative is part of the strategies to make the RSE efficient and more competitive in the region.

Rwabukumba said they are working on more initiatives to spur the growth of the local stock market, and help diversify its product offerings.

“We want to use the nature of our laws to make Rwanda the platform of choice for local and regional firms to raise long-term development finance.

The platform is ready for not only bonds and shares but also asset backed securities, Real Estate Investment Trusts (REITs) and other collective investment scheme products.

He says a few REITs developers are discussing with CMA on the possibility of listing on the market.

He adds that after putting in place the Rwanda National Investment Trust (RNIT) last year, they are optimistic the trust will launch the first fund very soon.

EAC exchanges’ integration good for local money market sector

Commenting on the ongoing EAC exchanges infrastructure integration initiatives, Rwabukumba says harmonisation is very important to ease movement of capital and skills, and “will definitely benefit Rwanda’s young stock exchange.”

Integration is also essential as it can be an avenue among others to raise capital for regional projects, such as the oil pipeline and the standard railway gauge (being undertaken by the EAC member states), he notes.

Presently, all the four EAC exchanges are working on a project to harmonise regional exchanges’ infrastructure, which is expected to create more interest among East Africans to trade and invest in shares and other financial instruments.

Once implemented, investors will be able to buy shares from any exchange across the EAC. It will also make clearing and settlement of transactions across the region easier and more efficient, Rwabukumba noted.

RSE part of the United Nations Sustainable Stock Exchanges Initiative

Rwabukumba said joining the United Nations Sustainable Stock Exchanges Initiative (UN SSI) last year will see the RSE become a part of the sustainable development model that is being adopted under the UN’s Sustainable Development Goals.

“We were the fourth stock exchange in Africa to join after Mauritius, Nigeria and Ivory Coast which was another milestone for us. It shows that we have been recognised as one of the stock exchanges that is moving in the right direction.

We are learning on how we shall be contributing towards encouraging sustainable investment practises because today’s investors are not only looking for value but responsible investments.”

He said they are seeing more eco-friendly investments coming up, tree plantings, woman emancipation among many others.

“It starts voluntarily when we start talking to companies about it because investors will soon not invest in companies that are degrading the environment, using child labour, degrading women or doing things of the like,” he noted.

“We want to join the entire world in order to develop our planet sustainably.”

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