The Capital markets Advisory Council (CMAC) of Rwanda, the regulators and overseer of the young financial market in the country has registered a modest growth this year despite the global economic crisis according to Robert Mathu the Executive Director.

"Our biggest challenge this year has been the global financial crisis although we were not directly hit as it did with other markets. The absence of the legal framework has affected the emergence of collective investment schemes,” said Mathu.

CMAC was established in 2007 with the Prime Minister’s decree seeks to promote and attract investment in the stock market. Mathu explained that in its second year of operation CMAC’s receivership of a foreign company to cross-list on the Rwandan bourse was a milestone.

Kenya Commercial Bank (KCB) this year listed two million shares on the secondary market on the four stock exchanges of the East African Community (EAC) region including that in Nairobi, Uganda and Dar es salaam stock.

Since KCB issued its shares, the Rwandan bourse formerly referred to as the Rwanda-Over-The-Counter (ROTC) has in total traded 68,100 shares in 42 transactions as per last month.

The operations manager of CMAC, Celeste Rwabukumba says that the price per share has since been fluctuating between Rwf160 at the beginning, the highest price per share being Rwf170 while the lowest that was registered is Rwf153.

A few weeks ago it fell back to Rwf160 a share and the minimum shares one can buy are 100 in a single transaction.

"The Rwanda over the Counter (ROTC) which facilitates the trading of KCB listed shares on the market has been the most attractive market region in the region,” Rwabukumba said.

According to CMAC, bond market at the ROTC platform is also registering interest from the public although there are no official applications.

Electronic trading

In 2009 ROTC also saw year has also seen the regional stock exchanges negotiating the harmonization of an electronic mechanism of trading.

Early this year, it was expected that electronic trading would commence in the second quarter of this year but there has been delays.

After the East African Securities Exchanges Association (EASEA) met early this year, among the series of initiatives it approved was to provide the Smart Order Routing System to electronically connect capital market in the EAC.

This mechanism has already been established in Kenya and Tanzania while Uganda is on course.

This according to Mathu there was a regional meeting in Kampala recently regarding harmonising of this mechanism. This means that the ROTC would achieve going electronic by the end of 2010.

Electronic trading according to officials will replace the manual transaction where stockbrokers have been bidding on the counter.

This means that the trading of securities will not be conducted face to face among the traders but instead on an on-line.

Domestic listing

CMAC has this year worked around the clock to attract local issuers. Government is particularly selling the shares it owns in four major companies to the public.

These include BRALIRWA the country’s sole brewery, whose offering of the country’s first Initial Public Offer (IPO) is expected in 2010.

Government which owns 30 percent stake in BRALIRWA will sell 25 percent to the public while the remaining five percent to Heineken which owns the majority 70 percent shares.

The government is also targeting four more companies which include the cement producer CIMERWA, the insurance company SONARWA, the Commercial Bank of Rwanda (BCR) and MTN Rwanda.

Other achievements
 
CMAC has this year succeeded in the integration of capital markets with other regional markets and regulators.

It is now a member to the East Africa Securities Exchange Association (EASEA) which is a regional association of stock markets.

Officials also said that it has joined the regional regulatory body of the East Africa Securities Regulatory Authorities (EASRA).

The institution which also doubles as a regulator continued in the capacity building program with two training programs this year after cabinet approved the capital market incentives. The capital market advertisement policy was also adopted.

The Figures

2007

The year CMAC was established with the Prime Minister’s decree

68,100
The number of KCB shares traded on the Rwandan bourse

25 percent
The stake in BRALIRWA that government is planning to sell to the public through the bourse 

Ends