Rwanda Stock Exchange opens with brewery IPO

Africa’s newest stock exchange is the Rwanda Stock Exchange (RSE), launched on 31 Jan to start trading the shares of brewer Brasseries et Limonaderies du Rwanda BRALIRWA (www.bralirwa.com). The exchange replaces the Rwanda-Over-The-Counter (OTC) market which has operated since 31 Jan 2008.

Prime Minister Bernard Makuza launched the RSE and said it is a key development milestone, according to news reports: “Building a strong financial system is a key element of Vision 2020; the Government will continue to facilitate the development of the capital market.” Finance Minister John Rwangombwa said Government had sustained a stable macroeconomic environment over the years and laid the appropriate environment to attract both domestic and international investments.

The RSE was formed as a dormant company after a March 2007 decree that established the Capital Markets Advisory Council (www.cmac.org.rw) to set up and regulate the transitional process towards a full stock exchange. CMAC had run the ROTC and would now be transformed into a Capital Markets Authority to act as regulator. The legal framework aims to comply with standards of the International Organization of Securities Commissions (IOSCO).

BRALIRWA IPO

Bloomberg agency reported that BRALIRWA shares surged 62% when trading began on the RSE on 31 Jan. It quoted Robert Mathu, Executive Director of CMAC, saying the stock first traded at 220 Rwandan francs ($1.67).

The Rwandan Government aimed to raise RwFr 22.1 billion (US$37.3 million) from selling its 30% stake in BRALIRWA. Of this 128.6 mn shares, or 25% of the company, were sold in the public offer at RwFr 136 francs (22.9 US cents) per share. The Government said this was a discount to the valuation of RwFr 170 each share, in order to encourage buyers.

Government was to sell the remaining 5% of its shareholding to Heineken Group, which earlier bought 70% of the brewer from the Government. BRALIRWA sells beers such as Amstel, Guinness, Mutzig and local brand Primus and has an estimated 95% market share and also bottles Coca Cola products. Net annual revenues are reported at around $93 mn.

The offer reportedly attracted $80 mn in bids. MBEA Brokerage Services Rwanda was lead transaction advisor. The IPO campaign included investor education, TV and radio ads and Rwanda’s first research reports.

Co-transaction advisor Renaissance Capital sold 60% of the international tranche offering to international and local investors across several continents. There were share orders from Africa, Europe and the United States and the international portion was oversubscribed more than 5 times.

The shares ended the week on 11 Feb at RwFR 189, according to the market report from CMAC.

Future share offers

Bloomberg reports that the Government is discussing the sale this year of its 10% stake in MTN Rwanda, 55% owned by South Africa’s MTN Group Ltd. Minister Rwangombwa said another shareholder with a 35% stake will probably also offer its shares in public offer.

State-owned Banque de Kigali, Rwanda’s biggest lender by assets, will sell shares in May 2011 and cement-manufacturer Ciments du Rwanda Ltd., Rwanda Commercial Bank (BCR) and insurance company SONARWA are among other companies partly owned by the State who may sell stock through the RSE.

Contract to Kenya’s central depository

Rwanda contracted Kenya’s Central Depository and Settlement Corporation (www.cdsckenya.com) for a year. The company said it will train staff of the central Bank National Du Rwanda (BNR). The bank aims to procure and install a system to run a central depository for the equity market using its own staff by the end of the contract. CDSC has handled the BRALIRWA IPO and many of the biggest share offerings in East Africa, including Safaricom.

Kenyan depositories and share registrars are competing to offer their services more widely in the region.

Market structure

CMAC’s Mr Mathu told East African Business Week that the law establishing Capital Markets and the law regulating the market were to be published before end of January.

Previously the Government owned majority shares in the dormant RSE, but now it has reportedly reduced this to “at least 20%”. The private sector, including stockbrokers, holds the majority. Mr Mathu said: “We would like to see a stock exchange that is going to be pro-business, active and capable of providing a very efficient service to the investors both domestic and international.” Stockbrokers have welcomed their inclusion in the ownership of the stock exchange saying it will hold them responsible for protecting the bourse.

According to statistics from CMAC, bonds worth RwFr 26 bn have been issued and listed for trading on the ROTC, including 7 treasury bonds (RwFr 25 bn) and one Commercial Bank of Rwanda (BCR) corporate bond of RwFr 1bn. Bonds traded on the secondary market have so far generated a turnover of RwFr 654.4 mn. Two Kenyan companies, Kenya Commercial Bank (KCB) and Nation Media Group (NMG), are cross-listed.

5 Responses to “Rwanda Stock Exchange opens with brewery IPO”


  1. GAHAMANYI JOHN

    THANKS FOR DISPRYING TO US THAT NEWS
    NOW HOW CAN ARE LOCAL PERSON CAN THAT BOND
    AND IF POSSIBLE PLZ DEAR CON YOU DIRECTE ME HOW SOME BODY
    CON BE A BLOK

    YOURS FAITH FULL

    GAHAMANYI B. JOHN

  2. Tom Minney

    Hi Gahamanyi B John, thanks for your inquiry. I think the best route would be to contact your local stock exchange or capital markets authority and they can: 1) put you in touch with a stockbroker who can help you buy shares or bondsand 2) tell you what is required if you wish to become a stockbroker. Thanks for your interest in the capital markets and I hope it leads to much prosperity for you.

  3. Murangira Nshimye Arnold

    bravo bravo to the development of the securities exchange in rwanda its a great opprtunity for the people who 1st n foremostlove rwanda n 2ndly who hv thr eyez on prosperity n individual betterment.pliz giv us more information on hw people from diff. walks of life can profit eithr at individual or company level ofcourse with some clear possible risques that shd b expected.thnx

  4. Tom Minney

    Hi Murangira, thanks for your comment and your enthusiasm. Yes, capital markets are a great opportunity for the investors to support and benefit from business growth and for businesses to be able to raise long-term risk capital. There has been too little of that available in Africa and lots of capital is needed in fast-growth economies such as Rwanda and East Africa in general. There is not space here to give a full guide to investing and perhaps the Capital Markets Authority (http://www.cma.rw) in Rwanda, if you are there, can help you with more information and guides, its website has links to investor education. From my side, I would advise if you are an individual, only invest money that you can afford to risk and only if you can keep it invested for the long-term. Remember, risks and rewards are linked so the higher the gain you are looking for, the bigger the risk that you could also lose some or all of your money and if an investment story sounds too good to be true, it probably is not true. Good luck and keep commenting on our posts.

  5. Deloras

    I enjoy what you guys are up too. This kind of clever work and exposure!
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