Archive for the 'Rwanda' Category

Sub-Saharan African sovereigns outside SA to raise $7bn in fixed income

African countries (apart from South Africa) are set to place $7 billion of debt this year, buoyed by low interest rates and a huge global appetite. According to this article in Bloomberg Businessweek by Roben Farzad, this year’s debt issues will be more than the previous 5 years combined and African capital markets are feeling the boom.
No wonder international investors who are “grabbing for yield and growth” (according to Farzad) are looking to Africa which the International Monetary Fund forecasts will grow at 5.6% this year against 1.2% in developed countries. But Africa’s terrible infrastructure, including electricity, bridges, roads and wastewater treatment, is costing African sat least 2 percentage points of growth. Some of the new bond proceeds are likely to go on infrastructure, which needs investments of up to $93 billion a year.
The article cites research from JP Morgan Chase that average yields on African debt fell 88 basis points in the past 12 months, to 4.35%. “Nigeria, Gabon, Ghana, Ivory Coast, Namibia, the Congo, Senegal, and the Seychelles have all seen their borrowing costs fall this year.”
“It’s a hugely exciting story,” Jim O’Neill, the chairman of Goldman Sachs Asset Management who plans to retire this year, said in an April 23 interview with Bloomberg Television in London, writes Bloomberg reporter Chris Kay: “The only thing one has to be a little bit careful of are many of those markets are still very undeveloped and suddenly there’s a lot of people around the world regarding Africa to be sort of fashionable and trendy.”
Farzad wonders how easy it will be to “service so much easy-money debt when the credit cycle turns, or if commodities and political stability decline. At least for now, though, you get the impression that sub-Saharan Africa has turned a corner in global capital markets.” And journalist Chris Kay quotes Charles Robertson, global chief economist at Renaissance Capital: “For governments, great, don’t look a gift horse in the mouth. I still don’t believe investors are getting risk-adjusted returns in the dollar-bond space.”
According to Kay, debt-forgiveness programmes have helped 45 African nations cut debt to about 42% of gross domestic product this year from an average 120% in 2000, according to data compiled by Bloomberg and IMF estimates. South Africa’s Finance Minister Pravin Gordhan says debt will peak at 40% of GDP in 2016, compared with more than 100% for the U.S. and an average 93% in the eurozone.
Another reason why Africa offers lower risk is that taxpayers have no expectations of massive social and other spending in nearly all countries. Meanwhile global appetites are shown by the $20 trillion reportedly invested in debt at less than 1% yield.

Some potential issues
Nigeria planning to offer $1bn in Eurobonds and a $500m Diaspora bond, according to Minister of State for Finance Yerima Ngama. It was recently included in JP Morgan and Barclays local bond indices. Yields on the existing $500m Eurobond, due 2021, were down to 4.05% by 3 May, from a peak of 7.30% in October 2011.
Kenya really boosted investor confidence in Africa with its peaceful outcome after elections on 4 March and the Finance Minister Robinson Githae said on 11 March they could be in line to issue up to $1bn by September.
Ghana fuelled by an oil boom, has seen its debt yields on the 10-year bonds down 3.43 percentage points to 4.82% since their issue in October 2007, said Bloomberg.
Zambia successfully raised $750m last year at 5.625% and is thinking to return for another $1bn. Yields were up 20 basis points to 5.66% by 3 May.
Tanzania has asked Citigroup to help it get a credit rating before issuing a maiden Eurobond of at least $500m. Finance Minister William Mgimwa said a total of $2.5bn was bid for a private offering of $600m of Government debt in March. According to this story on Reuters that bond’s pricing and structure at the time had shocked markets and appeared to benefit investors: “The cheaply priced US$600m seven-year private placement was described as a “disaster” by one banker. And certainly the immediate secondary market performance looked terrible. The bonds jumped 2.75 points on their first day of trading.. That works out at a cost to the government of US$4m a year in coupon payments, assuming that the bonds could have priced at the tighter level.”
Angola did a private sale of $1bn in debt in 2012 and will go for $2 billion this year, according to Andrey Kostin Chairman of VTB Bank OJSC, who helped arrange the first issuance, last October.
Mozambique and Uganda may also issue foreign currency bonds of $500m each, according to Moody’s last October.
Gabon’s $1bn of dollar bonds are down 4.78 percentage points to 3.13% since they were issued in December 2007.

Rwanda’s $400m Eurobond will pay for power, planes and conferences

The first Eurobond issued by Rwanda, due to mature in May 2023, raised $400 million at 6.875%. According to this article in Bloomberg Businessweek, some of the money will be used to pay for building a 28-megawatt hydropower plant. The fund received some $3.5 billion in orders for the bond, which has a coupon of 6.625%, and Finance Minister Claver Gatete said on 24 April that 250 investors took part, according to a report in New Times.
Speaking at the World Economic Forum in Cape Town this week, Gatete said the hydropower plant will be fully operational by June 2014, with 14-MW already onstream by December. Last month he told reporters the rest of the money will be used to complete the building of Kigali Convention Centre and pay off some of state-owned RwandAir’s debt for its expansion programme.
According to local news reports in April, he said: “The bond, which was oversubscribed, signals that international investors have confidence in Africa beyond the usual commodity growth story. Rwanda’s intentions are to invest in infrastructure as part of building a modern, dynamic, service-based economy that is connected to international markets and that allows for rapid development.”
Bloomberg quotes him this week: “We didn’t just go to the market to look for any amount of money — we went for specific projects,” he said. “We have to be very careful when we go to the market and defining what the money will be used for.” But it could sell more debt if it needs to fund “high-impact” projects in tourism and energy.
“Very good news for the country…#Rwandabond, investors are honest judges on our country’s story and progress…they have said it,” the President wrote on his Twitter account @PaulKagame.
The bond has which has a coupon of 6.625%, and the issue was handled by BNP Paribas and Citigroup as joint lead managers, with legal work by London lawyers White & Case, according to their press release , which adds they advised 6 of the last 7 sub-Saharan African sovereign issues. A Rwandan Government delegation did roadshows in Boston, Frankfurt, Hong Kong, London, Los Angeles, Munich, New York and Singapore. Reuters quoted the fund managers saying it was “priced to perfection” and quoted Mark Bohlund, senior economist, sub-Saharan Africa, at IHS Global Insight: “If you want to have exposure to sub-Saharan Africa but you’re worried about a drop in commodity prices and you want to rebalance your portfolio Rwanda is a good investment.”
The yield on the 6.875 percent dollar bond due in May 2023 was little changed at 6.9 percent by 8 May. it is traded on the Irish Stock Exchange. Fitch Ratings rated long-term foreign and local currency rating at B, five levels below investment grade. Standard & Poor’s also gave B with stable outlook. Rwanda’s economy grew by 8.2% for the last 5 years but the Government targets an average 11.5% annual growth in the Economic Development and Poverty Reduction Strategy II (EDPRS II).
The latest IMF mission commented [link] on 16 April: “The economic outlook for 2013 has weakened somewhat since the 5th review. The growth of the construction and service sectors is expected to slow down in response to tighter economic policies. This will be partly offset by stronger growth in agriculture (food crops), for which the first harvest of the year was good, and an acceleration in foreign-financed investment projects. Growth is expected at 7.5% for the year. Downside risks predominate, stemming from possible cutbacks in aid, delays in project implementation, and a more challenging global environment. Inflation is expected to rise to 7.5% by end-2013.”

Rwanda savings and credit coops to look at capital markets?

Local savings institutions are one of the rising forces in African capital markets and we are interested in learning more about them. Here is some information from Kigali, Rwanda. Do you agree that savings and credit cooperatives should be investing in equity markets?

Rwanda’s Savings and Credit Cooperatives (known as SACCOs) are being encouraged to take more interest in the capital market. A meeting organized by the Capital Markets Authority in Kigali attracted over 50 managers and leaders of several SACCOs in May, according to a story in local media including East African Business Week.
SACCOs are estimated to hold deposits worth over RWF15 billion (US$24.7 million). The CMA suggested they could get better returns for their members’ money compared to investing in deposits at commercial banks, but acknowledged they needed more knowledge of financial investment and there are not enough investment opportunities. It was suggested they could purchase shares in companies listed on the Rwanda Stock Exchange – Bank of Kigali and brewer BRALIRWA are the local listings, or in government securities such as treasury bills and bonds or corporate bonds or commercial paper. BRALIRWA listed in February 2011 and the share price has since more than doubled, and BoK listed last August after raising US$34.8m.
Charles Furaha, the Legal & Corporate Manager at the CMA, was reported as saying:”We want to interest SACCO leaders in the advantages of investing in capital markets as a way of maximizing benefits for their members whose deposits are tucked away in banks.”
Robert Mathu, Executive Director at the CMA, was reported saying that the Rwanda bond market has a total worth of $46.7m. If investors were worried about government bonds after the bad news from Europe, they should think about shares, not only the Rwandan companies but also companies throughout the East African region.
At least 220 SACCOs had been fully licensed in Rwanda to grant loans by 31 January 2012.
A previous article in the local media reported that the Government launched Umurenge SACCO in all districts of the country in November 2011. It is a legal entity which is a cooperative and individuals invest their money and get loans to invest in farming, trade, basic needs and other purposes. Damien Mugabo, the director general of Rwanda Cooperative Agency (RCA), was reported last November that 1.3m peo¬ple are members of Umurenge SACCO country wide. Government started thinking about it in 2008 after a study showed that 52% of Rwandans had no access to formal financial services and were saving money in holes and other unsafe places. Mugabo said: “Umurenge SAC¬COs reach out to members and areas that are unattractive to banks, they can provide access to members of the population who would not normally save in the formal sector and physically not access a classic financial institu¬tion, due to locality and deposit restrictions.”
He added that many people had bad experiences in 2006 with micro-finance institutions (COOPECS) that were mushrooming but were bady managed. Umurenge SACCOs had been making good progress since 2009.

5 Africans named social entrepreneurs of 2012


Five leading Africans and innovators were named Social Entrepreneurs of the Year 2012 Africa last week at the World Economic Forum on Africa in Addis Ababa, Ethiopia. The awards are made by the Schwab Foundation for Social Entrepreneurship and were presented by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

The five winners include 2 entrepreneurs from South Africa and 1 each from Ethiopia and Rwanda, plus an award to a team (2) in Burkina Faso:

Bethlehem Tilahun Alemu, Co-Founder and Managing Director, soleRebels, Ethiopia

SoleRebels uses recycled car tyres for rubber soles to create durable, stylish and eco-friendly footwear for international markets. It offers training and employment to hundreds of underprivileged workers in Ethiopia, tapping the country’s rich artisan heritage and creating a new employment model for local enterprises. it also uses other environmentally friendly practices and is committed to zero carbon footprint.

Sameer Hajee, Chief Executive Officer, Nuru Energy Group, Rwanda

The group works with micro-entrepreneurs to disseminate its Nuru LED light, which gives up to 26 hours of light and costs one-sixth of the cost of kerosene to recharge. It can be recharged using an off-grid, pedal-powered platform. So far, Nuru Energy has set up 70 village-level entrepreneurs who have sold 10,000 Nuru lights. Many homes in Africa are not connected to electricity grids.

Paul Scott Matthew, Director Africa, North Star Alliance, South Africa

In the 1990s, Paul Matthew saw the alarming impacts of HIV/AIDS on mobile workers such as truck drivers and realized these workers lacked access to basic healthcare. North Star Alliance provides mobile workers and related communities with continual access to high-quality health and safety services through a network of interlinked clinics known as “Roadside Wellness Centres”. Since opening its first centre in 2005 in Malawi, North Star has grown to 22 centres in 10 countries.

Andrew Muir, Executive Director, Wilderness Foundation, South Africa

The Wilderness Foundation, founded in 1972, integrates conservation programmes with social and educational work. It has trained thousands of youth to be community leaders and national park rangers and more than 100,000 disadvantaged/vulnerable youth have benefitted from the Wilderness Foundation through its social intervention and environmental education programmes. The stewardship of the Wilderness Foundation has rehabilitated over 200,000 hectares of African wilderness and these areas are being expanded in the interests of conservation and environmental protection.

Seri Youlou and Thomas Granier, Co-Founders, Association la Voute Nubienne, Burkina Faso

Seri Youlou, a farmer from Burkina Faso, and Thomas Granier, a French mason, built a Nubian vault home in Burkina Faso over 10 years ago. By training farmers in the construction of homes with vaulted earth-brick roofs, the association provides an affordable, ecologically sustainable housing alternative and source of income to farmers during the off-seasons. Today, more than 200 masons have built over 1,300 Nubian vault homes in West Africa.

Hilde Schwab, Chairperson and Co-Founder of the Schwab Foundation for Social Entrepreneurship, commented in a press release: “Africa has seen tremendous growth over the past decade. Social entrepreneurs use innovative approaches to extend access to healthcare, education, energy and housing to marginalized populations that may not otherwise be included in the traditional markets. They ensure that growth, such as that experienced in Africa, is and will be inclusive.” Social entrepreneurs implement innovative and pragmatic solutions to social problems by tackling the root causes and creating social transformation

The Schwab Foundation was founded in 2000 and has been identifying the world’s leading social entrepreneurs in over 40 countries around the globe.


East African investors opening accounts at Nairobi Stock Exchange

Although the number of investors from other East African countries opening trading accounts at Kenya’s Nairobi Stock Exchange ( is still very small, it is growing more consistently in the last 2 years than other categories of investors. According to data to 30 Sept released by Kenya’s Capital Market Authority (, East African individual investors opened 97 securities accounts at Kenya’s Central Depository and Settlement Corporation ( This compares to 92 accounts opened in the full year 2010 and 79 in 2009.
By comparison Kenyan individual investors only opened 27,669 accounts in the 9 months to September 2011, compared to 120,756 accounts opened in 2010 and 52,836 in 2009. Kenyan equity trading has remained subdued as investors say high interest rates make them choose government debt securities over equities.
One potential reason for the East African interest, according to an article in the East African , is that Ugandans are opening trading accounts at the NSE in anticipation of the IPO of electricity distributor Umeme ( scheduled for 2012. Umeme is expected to cross-list at the NSE and the Ugandan Securities Exchange ( Some investors open multiple accounts ahead of a potentially “hot” initial public offering (IPO) of shares, where they hope to sell their initial allocation quickly and make a quick profit, as this is likely to maximise their share of allocation if the IPO is oversubscribed.
Trading experience shows that cross-listed East African shares such as Centum, Kenya Airways, Jubilee Insurance, trade more on the NSE compared with the Dar es Salaam Stock Exchange ( and USE. The increased liquidity in Nairobi means that East Africans are better off having a trading account at the NSE. The paper comments that Rwandans, Tanzanians and Ugandans are probably realising this fact and also taking positions ahead of the listing of some of their firms on the NSE by opening more CDS accounts in Nairobi: “Investors will go the extra mile to open and operate, as proxies, CDS accounts in the names of their relatives or friends who know nothing on trading in shares. Expect an influx of Rwandese, Tanzanians and Ugandans at the NSE in 2012.”

Bank of Kigali IPO lifts Rwanda Stock Exchange: 52% gain on first day

Interest in share offers is high in Rwanda, after shares of Bank of Kigali (BK) rose 52% to RWF190 in their first day of trading on 1 September. The Initial Public Offer (IPO), which opened on 30 June and ran for a month, offered the shares at RWF125. According to today’s market report (5 September) total trading today was 5 deals in BK shares which ended at RWF172 (it closed on Friday at RWF 191) and in brewer BRALIRWA which was unchanged at RWF246.
The BK shares offered included a sale by the Government of its 20% stake and the bank offered a further 25%, making a total offer of 300.3 million shares for a total value of RWF37.5 billion ($63.6 m). This was 274% oversubscribed with Rwandan investors making up 75% of the shareholding. The retail investors’ pool was oversubscribed by 291%, institutional investors from Rwanda 165%, institutional investors from the region 221%, international investors 330% and BK employees and management 135%, according to a report in the East African newspaper.
The bank plans to use the IPO funds to expand its network including opening 44 branches in 2011, increase the loan portfolio and consolidate its leadership position in the increasingly competitive banking industry. The listing should also boost activity on the young RSE, Africa’s newest stock exchange which was launched on 31 January
Lado Gurgenidze, chairman of the BK board, is reported in New Times newspaper saying: “The transaction and new capital comes at the right time when the bank is focusing on building a great bank and retaining the leading position in the market. Through great service and 45% of the shares being in the hands of the public, we have all the reasons to be optimistic that it will be very liquid on the secondary market.”

Investors waitng for more offers
It is the fourth listing on the RSE. When it launched in January it immediately started trading the shares of the first domestic IPO, brewer Brasseries et Limonaderies du Rwanda BRALIRWA ( This had been offered at RWF136 and started trading at RWF220. The other two counters are cross-listings from Kenya: Kenya Commercial Bank and Nation Media Group.
Reuters reports that appetite for shares is likely to be strong, partly because of the favourable pricing. The BK shares were offered at a multiple of 1.4x book value, a 15% discount to Kenyan banks at the time of the sale. The article quotes Nkoregamba Mwebesa, managing director of CFC Stanbic Financial Services in Kenya, saying: “Being a government exit, the Government is able to offer a discount which will attract (investors). We should continue to see appetite for all that. Rwanda is also stable politically, and that encourages investors as well. When the Government is exiting they don’t care about dilution. They are not out to really make money. The agency reports that market players said the main aim of the government was to help kick-start the bourse.
Future share offerings are likely to attract sustained interest, including government plans to sell a 20% share in the country’s biggest insurer Sonarwa (Societe Nouvelle d’Assurance du Rwanda – Nigeria’s IGI owns 35%). It is also hoping to sell shares in what Reuters called “an unidentified cement firm”, although earlier this year Ciments du Rwanda Ltd was mentioned.
Government has also held talks about selling its 10% stake in telecom operator MTN Rwanda. MTN Group is majority shareholder and has the right of first refusal on any share sales. John Rwangombwa, Minister of Finance and Economic Planning, reportedly said earlier this year: “We have two options; if MTN gives us (Government) the price we want, we will sell the shares to them directly while the other option is through an IPO depending on the other investor.” (as reported on this website)
The Minister had also said that Government would sell more of its stake in BK later. It owned 66.3% before the offer.

T+2 settlement here, electronic trading “by June”
On 3 August the RSE announced that it was adopting a T+2 settlement cycle for all securities with effect from 5 August. Sellers of securities receive money and transfer of ownership is effected on the third day. This replaced T+5 for equities and T+3 for bonds. The new system was made possible after the Central Bank of Rwanda (BNR) introduced a modern payment system, the Rwanda Integrated Payment and Processing System (RIPPS), which offers real-time gross settlement (RTGS), an automated clearing house (ACH), an automated transfer system (ATS) and a central securities depository (CSD).
Reuters reported that the next step would be electronic trading and other steps to attract more stock and debt issues. Robert Mathu, chief executive of Rwanda Stock Exchange, was reported as saying: “We are hoping to put in place an electronic trading platform by June next year.”

British American Investment launches Kenya IPO

British American Investment Company (Kenya) Ltd ( launched its initial public offer (IPO) on 12 July, aiming to list on the Nairobi Stock Exchange. It aims to raise KES 5.58 billion (US$62.2 million) for expansion in the offer which is open until 5 August.
British American is issuing 650 m new ordinary shares at KES9 each. East African retail investors and foreign investors have each been allocated 30% of the shares, institutional investors 37% and employees, agents and individual life policy holders get the remaining 3%.
The offer was launched by Prime Minister Raila Odinga. He urged more people to use insurance products, and said market penetration is only 2.3% of GDP, according to Kenyan Broadcasting Corporation. The Standard newspaper reports him saying “I would like to take this opportunity to assure investors that Kenya is on a renewal path.”

Expansion: “missing middle” and new products
According to a report in Kenya’s Business Daily newspaper, of the money raised KES1 bn will be used for new investments and entry into the regional market while KES 1.3 bn would be used to grow its Kenyan insurance businesses and to expand its asset management business, including launching new funds for Kenyans in the diaspora as well as local and international investors.
The company will use KES2.5 bn to set up real estate investment trusts when the proposed law comes into effect and to develop property investments, including commercial buildings and housing units. KES750 m is to offset a loan from Commercial Bank of Africa (CBA) and KES 300 m is for offer expenses.
The paper reports British American’s chairman Nicholas Ashford-Hodges saying funds raised would be used to boost the company’s operations in Kenya and expand to regional markets: “This IPO will give British American an opportunity to increase the scope of its operations and widen its footprint.”
The company hopes to seize emerging opportunities through innovative products such as micro-insurance and bank-assurance. According to the Standard, managing director Benson Wairegi said the company is developing more products for the retail market and small and medium-sized businesses: “We seek to fundamentally redefine the scale and scope of the insurance sector in Kenya and the wider region. Our established model of scale, reach and multi-layered selling will also be extended to the retail market and SMEs in the wider geographical region.”

Regional expansion – Uganda, Tanzania, South Sudan, Rwanda

On 7 July, BAT launched an insurance services business in Uganda through a subsidiary, Britam Insurance Company (Uganda) Limited, which has a capital of UGX5.6 bn ($2.2m). It also aims to open offices in Tanzania, Rwanda, and Southern Sudan.

Profit turnaround
British American is also the holding company of British American Insurance Company (Kenya) Ltd and British American Asset Managers Ltd (BAAM).
The market capitalization of the new company will be KES19.4bn ($216.3m), the highest among listed insurance firms. CfC Insurance Holdings, which was listed by introduction in April, was valued at KES6.85bn as at the close of trading yesterday, Jubilee Holdings Ltd at KES8.86bn, and Pan African Insurance at KES1.92bn, according to the paper.
Business Daily reports that British American Group posted KES2.7 bn in profits after tax last year, up from KES421 mn loss in 2009. The company made KES4.68 bn (KES 196m in 2009) in investment income and KES220 m (KES 32 m) in other income.

Rwanda’s bubbling brewer – profits soar 63%

Rwanda’s biggest brewer, the Brasseries et Limonaderies du Rwanda BRALIRWA (, says post-tax profit leapt by 62.8% in 2010, driven by increased sales, higher pricing and improved cost management. BRALIRWA was the first listing on the Rwanda Stock Exchange which opened on 31 January.
BRALIRWA’s Initial Public Offer (IPO) last November was 174% oversubscribed. It has encouraged Government to push ahead with privatization plans outlined in the current 5-year plan.
According to a report on Reuters,Chief Executive Officer Sven-Erik Piederiet said in a statement on Tuesday: “I am confident that BRALIRWA remains well positioned to capitalise on the attractive growth opportunities in Rwanda.”
Net profit for the year to 31 December increased 63% to RWF 10.3 billion ($17.5 million) against the previous year (RWF 6.34bn)and in a press release the company says this was “driven by robust operating profit growth, lower interest expense and lower income tax expense”. EBIT was up 49.2% “driven by a strong volume performance, higher pricing and effective cost management”. Revenues were up 16% to RWF 52.8 bn through a 13% rise in volumes and higher prices. The brewer is well positioned to capitalise on growth opportunities. Earnings per share jumped 62.8% in 2010 to 20.09 francs. Despite the growth plans, the company recommended a 100% payout with a dividend of RWF 20.09 per share, up from RWF 12.34.
BRALIRWA shares closed on 17 May at RWF 228, up 68% on the January launch price of RWF 136, according to a report in New Times newspaper, the price climbed by RWF 21 that day, as investors anticipated the dividends.
BRALIRWA, majority owned by Heineken, is Rwanda’s oldest brewery. It has rights to produce brands such as Guinness and Amstel and branded soft drinks such as Coca Cola. Its main brand is Primus.
Jean Paul Van Hollebeke, Chairman of BRALIRWA’s Board of Directors, said that the brewer achieved compounded average growth in net profit of 56.1% over the period 2007-2010, demonstrating the successful implementation of strategic initiatives. He said a strong operational focus on top-line growth and disciplined cost management, combined with a favourable economic environment and the consistent implementation of constructive government policies drove a robust profit: “BRALIRWA was able to deliver the strong performance owing to a continuous focus on our core values, the talent and commitment of our people, the strength of our brands, the partnerships with our distributors and our ambition to continue to lead the market and promote profitable future growth.”
Rwanda Stock Exchange Operations Manager Celestin Rwabukumba was quoted saying the perception of local investors of the market is now positive because of its transparency, something likely to influence future Initial Public Offerings (IPOs): “It does provide serious confidence in the market and it is likely to influence other companies that may want to list.”

Rwanda Government to raise $42 mn by selling shares in Bank of Kigali and MTN

The Rwandan Government plans to raise Rwf25 billion ($42.2 million) through the sale of its shares in Bank of Kigali Ltd ( and telecom company MTN Rwanda ( in coming months.
The bank is Rwanda’s biggest lender by assets and it said the Government will sell a 20% stake to private investors in an Initial Public Offering (IPO) scheduled for June, according to a report on Bloomberg. In addition the bank will offer 25% of its shares to the public, according to the report, citing Chief Operating Officer Lawson Naibo. The Government owns 66.3% and will anticipate selling the rest of its stake later, according to John Rwangombwa, Minister of Finance and Economic Planning, during a press conference on 9 May on the budget framework. He is quoted in the New Times newspaper as saying: “BK is confirmed; we are to sell our shares through an IPO. We started the process and it’s expected to be concluded by September, including listing BK on the Rwanda Stock Exchange (RSE).”
Minister Rwangombwa said there is expected to be strong demand. Last November 2010, the Government sold 25% of Brassieries et Lemonaderies du Rwanda SA (BRALIRWA), a unit of Heineken NV (HEIA), and the IPO was 174% oversubscribed. BRALIRWA shares closed at RwFr 228, up 68% on the January launch price of RwFr 136.
BK plans to open 44 branches across Rwanda in 2011, and the stock should be attractive stock given its rapid growth and stability.
The Minister also said Government is in negotiations with MTN Group regarding its 10% stake in MTN Rwanda. MTN Group is majority shareholder and has the right of first refusal on any share sales. The Minister reportedly said: “We have two options; if MTN gives us (Government) the price we want, we will sell the shares to them directly while the other option is through an IPO depending on the other investor.”
The Treasury will include the expected proceeds in the budget for the next fiscal year. The Minister said: “This is part of the Government commitment to promote accelerated economic growth under its five year plan of EDPRS (Economic Development and Poverty Reduction Strategy 2008-2012) but also its the approach to liberalise the market.” Rwanda is a high-growth country and a top performer in improving its business and economic climate. It is working towards an ambitious long-term Vision 2020 that seeks to transform the country into a middle-income economy.
The Government remains keen to use IPOs to support the growth of the Rwanda Stock Exchange launched on 31 January by boosting market liquidity and ultimately supporting the country’s economic growth through attracting more inventors and increasing national savings.
The RSE has so far mainly attracted Treasury and corporate bonds, and 2 cross-listed Kenyan companies, Kenya Commercial Bank (KCB) and Nation Media Group. BRALIRWA is the only local listing.

Rwanda Chair calls for integrated East African capital market

Dr James Ndahiro, Chairperson of the Rwanda Stock Exchange, said East African countries should form a single stock market by 2015. He is quoted in the local Standard newspaper as telling a conference in Nairobi: “Financial markets contribute to 28% of the region’s gross domestic product, which stands at $80 billion. This is a very big percentage from one sector, which should be nurtured to promote further growth.”
He said that the growth of stock and capital market would help East African countries liberate themselves from dependence on foreign aid.
Companies cross-listing their stocks and offering shares to citizens of the 5 countries without discrimination was one step, he said: “We saw it in Safaricom initial public offering where all citizens of countries in East Africa bought shares as local investors. This was good because it encouraged flow of investment in the region,” he said.
He also said governments should spread knowledge and encourage people, particularly the middle-class, to invest in stock markets and infrastructure bonds: “This is where Governments can find money to develop infrastructure, create employment opportunities and improve the quality of life of its citizens.”
The Summit of the East African Community Heads of State met in Dar es Salaam on 19 April and appointed Dr. Richard Sezibera, who was until April Rwanda’s Minister of Health, as Secretary-General for a 5-year term.