As a Kenyan journalist working in Rwanda, I have read and covered several Kenyan companies strategically fanning out into the entire East African Community (EAC)  region to make various forms of investments.

Right here in Rwanda, companies such as Serena, Nakumatt, KCB, Equity Bank and others have brought in various forms of interventions that have contributed to the growth of the Rwandan economy.

Further still, apart from the Kenyan corporate brands, hordes of professionals in construction, education, hospitality, media and corporate communications, entertainment and finance, to mention but a few, have increasingly entered Rwanda to join the fast-paced reconstruction agenda.

Such tales cannot be said to be very accurate in the strict sense of my trade of journalism. Such stories are normally told over the rounds of beer that many Kenyans drink in pubs scattered all over Kigali.

However, it can be said with some level of certainty,  how  Kenyan  investors are making high returns just by trading in Bank of  Kigali (BK) shares at the Rwanda Stock Exchange(RSE).

The increased demand for BK shares, which started trading at the RSE in the last two weeks, has seen Kenyan investors who bought into the bank’s initial public offering (IPO) register capital gains of  Rwf 66  per share.

On its first day of trading, the shares opened at Rwf135 each, closing the first week of its trading at Rwf191. Analysts put the gain at about 53 percent on the offer price of Rwf125 per share. By close of first week of trading BK shares, the RSE counter had traded about 4.8 million shares and bids of 2.1 million shares were on offer demonstrating the volume of business that took place.

When the BK IPO opened in June 30, Kenyans literally scrambled for the BK shares. Kenyans are known to be risk takers. Please do not take me wrong about that statement. By that, I mean that Kenyans saw a huge opportunity to, literally, make high returns in an industry that was relatively virgin in nature.

True to the predictions of investors who bought the BK shares, the offer was  oversubscribed almost threefold, with Kenyans accounting for almost a quarter of the retail investors who participated, a sign of the appetite  Kenyans have for virgin opportunities in Rwanda as an emerging economy in the EAC.

Kenyans are known to have a fairly detailed understanding of gains that can be made in the stock exchange. If anything, the Nairobi Stock Exchange (NSE) is the oldest and the most vibrant stock market in the EAC having been in operation since the mid 1950s.

However, what surprised me the most was the news by analysts who compared two IPOs that opened at the same time at both the NSE and RSE.

The IPO at NSE was for a blue chip firm known as Britak, an anglo-American insurance services provider. Britak is well known in Kenya and its parent company is respected in the world, as a rock solid investment.

The IPO at RSE, is known as a Government of Rwanda owned bank that is being opened up for private investments for the very first time. Ordinarily, one would naturally go for the stocks of a blue chip multinational such as Britak, not shares of a government owned bank.

The common expectation would be that the stocks of a blue chip multinational would provide much higher returns as opposed to the stocks of a government owned bank regardless of the stock exchange one would be talking about.

But the reverse happened. Meaning that there was very good news for Kenyans who invested in BK shares at RSE rather than the Kenyans who took up the Britak   IPO.

The positive performance of the BK shares contrasted with the 40 percent under-subscription of the Britak IPO at the NSE.  The comparison in terms of earnings from the two IPOs points to a shift by Kenyan investors to the Rwandan market which offers better returns.

The over-subscription at RS , especially in the foreign and institutional investors’ pool, means that such discerning investors  have to resort to the secondary market at RSE to achieve what they had applied for initially.

The author is an editor with The New Times
ojiwah@gmail.com