Crystal Telecom shares were the most traded on their debut on the stock market recording the highest turnover compared to the other counters, yesterday’s market report indicates.

The company made its first trade at the secondary market of 2,000 shares at Rwf145 each, then went on to trade 4,000 more shares at Rwf144 each, raking in a total of Rwf886,000.

The turnover could have been higher but most of the bids made were for the firm’s shares at Rwf104 and Rwf105, similar to the initial public offering (IPO) price, thus not matching the new shareholders’ offer prices that were at between Rwf285 and Rwf300 per share.

The day’s trading showed that many investors who had missed out on buying the shares during the IPO last month were eager to buy at the same price as the IPO price, but the shareholders differed.

Davis Gathaara, the managing director of Baraka Capital, said many people will be looking to buy the shares from the secondary market.

"People look at Crystal Telecom at the fundamentals of MTN Rwanda since the telecom sector is going to go through the roof very soon. So for me this is a long-term investment,” he said.

However, Gathaara expressed fears over the firm’s activity on Rwanda Stock Exchange (RSE), saying the IPO period was too short (two weeks) and that if most of the firm’s shares had been sold to foreign investors, the available shares for trade on the stock market would be inadequate.

"Through the book building process, foreign and local investors may over bid each other and beat the local investors and, at the end of the day, those doing the IPO get enough since the foreigners have paid more than the offer price, but no action comes in at the secondary market after,” Gathaara said.

"If you said Rwanda Social Security Board (RSSB) is a majority holder of those shares, the share price is likely to sky rocket, which is what people want.”

He said the Rwandan capital market is facing ‘a devil and the deep blue sea’ situation because the market needs foreign investors to boost it. But then again, Gathaara noted, if the investors are brought in, they pick up all they can and what they leave for the local players is too small to move around.

"There are new players looking at the markets because of the issues across the world. There are stock market problems in China, Greece and Nigeria. Here, the float of the companies selling shares is too small for them. If one of them asked if he could get $10 million of Bank of Kigali, I would say no,” Gathaara added.

"So shares are available in the market but they are small, leaving the market not liquid enough, but when we get more products, more people will come on board. If today we have attracted a telecom company, then tomorrow an agricultural one will come too. At least now we have a bank, a manufacturing firm and a telecom.”

Of the more than 270 million shares offered during the IPO, 67.5 million were allocated to retail investors both in local and across the region, while the remaining 75 per cent were allocated to local and foreign institutions.

Jack Kayonga, Crystal Telecom chairperson, told reporters after the listing that all those who subscribed for the retail lot were allowed to buy the shares, while the local and regional institutional investors got the lion’s share of the institutional lot compared to the international investors, thus allaying Gathaara’s fears.

Kayonga was ecstatic on how the first day went for the company and was optimistic that shareholders who bought shares during the IPO would not hold onto them but instead trade them actively at the stock exchange. editorial@newtimes.co.rw