The cross-listing of Kenyan financial services giant, Equity Group Holdings at the Rwanda Stock Exchange (RSE) in February, led to doubling of the bourse’s total market capitalisation during the first quarter of this year, the market’s quarterly report indicates.

The report indicates that the market capitalisation, which is the total market value of all listed companies’ outstanding shares, was at Rwf2.93 trillion ($4.1 billion) at the end of last month, up from Rwf1.3 trillion ($1.9 billion) in January.

Equity Group Holdings listed more than 3.7 billion issued ordinary shares, at a par value of Rwf3.76 following Capital Markets Authority approval.

The company, with a market capitalisation in excess of $2 billion, thus became the largest listed company at the bourse.

The firm’s counter trades shares once in a while, but performs better than other cross-listed firms which barely trade. Brokers and investors, who have often dubbed cross-listing as a marketing tool for companies with business interests in the country of cross-listing, had anticipated Equity to follow same trend.

According to the report, the counter accounted for 0.08 per cent of the total trade recorded in the last three months, while domestic firms, Bank of Kigali and Bralirwa accounted for 53.29 and 46.56 per cent, respectively.

A total of 30.3 million shares were traded during the period worth a total of Rwf10.3 billion.

Davis Gathaara, the managing director of Baraka Capital, a brokerage firm at the RSE, noted that last quarter’s performance was not as good as that of the same period last year, adding that some investors are still waiting for Bralirwa to announce its last year’s financial results.

He added others are saving to invest in firms that are planning to issue initial public offerings this year, like I&M Bank Rwanda.

"Investors are weighing their options, especially with the pending I&M Bank IPO. We will probably continue to see sluggish performance at the bourse, with share prices remaining largely unchanged as people participate in the IPO,” he said.

The government confirmed that it would sell its 19.8 per cent stake in I&M Bank Rwanda this month and is going to do so through an IPO at the RSE. During the first quarter of last year, the bourse made a total turnover of Rwf11.6 billion from 44.8 million shares and bonds traded, higher than the performance of the first quarter of 2015.

Last quarter, 117 transactions worth Rwf5.5 billion were recorded in January, the highest number of transactions registered over the period.

In February, 91 transactions worth Rwf622.1 million were recorded, while 69 transactions worth Rwf4.1 billion were recorded in March.

The report indicates that domestic investors dominate trade during the period, accounting for 77.32 per cent, while East African Community and foreign investors accounted for 19.84 and 2.83 per cent, respectively.

On the bond market, only 25 million bonds of the Rwf15 billion Treasury bond issued in February this year were traded at Rwf101 each last month, with no bond trades recorded in January and February.

The Rwanda Stock Exchange All Share Index (ALSI) increased marginally from 135.63 points in January to 137.29 points last month, while most of the firms’ share prices were stable during the period.

business@newtimes.co.rw