Rwanda’s capital markets advisory council (CMAC) is now a member of the East African Member States Securities Regulatory Authority (EASRA).

The decision to admit Rwanda was made during the 25th consultative meeting of EASRA in Kampala.

Rwanda signed the EASRA Memorudum of Understanding (MOU), thereby becoming the fourth member of EASRA.

The MOU provides a mechanism for fostering market integration of the East African capital markets and establishes a basis for co-operation and mutual assistance among the members.

Finacial gurus say Rwanda’s admission to EASRA  is expected to foster the integration of East African markets by December 2009.

"This is a part of the process of harmonising and developing the regional markets together. It is going to be easy for people within the region to do business and operate effectively,” Japheth Kato, the chief executive officer of Capital Markets Authority, Uganda said.

After being admitted, management of CMAC believes the capital market will lead Rwanda towards becoming a financial hub.

"The capital market will play a significant role in the integration of Rwanda into the regional economy as the flow of capital and people will accelerate among the East Africa countries,” a statement from CMAC reads in part. 

To achieve this, CMAC has promised to develop a vibrant debt and equities market, encourage a savings culture and increase the level of public awareness.

The consultative meeting by unanimous resolution, elected a new chairperson, Stella Kilonzo, the chief executive officer Kenya capital markets authority.
The next EASRA meeting will be held in Rwanda in July, 2008.

Rwanda bourse
Capital market operations in Rwanda started off with the launching of the first trading session of the Rwanda OTC (Over the Counter) market on 31st January 2008.
The event was officially inaugurated by H.E. Paul Kagame, the President of the Republic of Rwanda, who was the guest of honour. The President gave a key note address and rang the ceremonial bell to commence trading operations.

CMAC
Capital Market Advisory Council (CMAC) established the capital market operations and management. CMAC was established by a government decree of March 2007, to guide in the development of a capital market.

Debt market
The debt market was the first product of the capital market in Rwanda. The Government issued and listed Frw5 billion 2-year Treasury bond. The second security to be listed was a corporate bond issued by Rwanda Commercial Bank (BCR).

The bank raised a Frw1 billion through a private placement in the first series of their planned Frw5 billion 10-year unsecured debt to invest in the mortgage sector in Rwanda.

Secondary market
The statement from CMAC further says the establishment of an active secondary bond market will provide a basis for developing a yield curve for future pricing of debt and other financial assets by the private sector in Rwanda.
It adds that initially, the secondary market may not be active with trading activities. However, as the number and variety of listed securities rise in tandem with the level of awareness and participants, the number of transactions will increase.

Equities
The equities markets will be activated when the OTC market is eventually utilised as a platform to sell the remaining government shares in private sector companies under the privatisation programme. Ultimately, CMAC expects the capital market to improve the well being of the citizens of Rwanda through the access to investment opportunities presented by capital markets.

A legal framework that will offer competitive and entrepreneurial environment in the financial sector while protecting investors from undue risks associated with market malpractices has been promised.
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