Bond market records 910% growth in value during first six months of the year

The bond recorded a huge 910.6 per cent growth in revenue in the first six months of the year, half-year market statistics from the Rwanda Stock Exchange (RSE) indicate. According to the date, the bond market raked in a massive total turnover of Rwf514.5 million from Rwf470.7 million worth of bonds transacted in 33 deals over the reporting period. The performance vindicates government’s efforts aimed at encouraging Rwandans to invest in bonds over the past one and half years. The drives that are part of the government’s quarterly TB issuance programme have seen the participation of retail investors, including SACCOs grow significantly from about one per cent in 2014 to 14.6 per cent in May. Institutional investors and banks accounted for 50.39 per cent and 35 per cent participation rate, respectively. Institutional investors were less than 10 per cent in 2014. Proceeds from the bond issues have been used to finance infrastructure projects, and support the development of the local capital market. The government has so far issued eight TBs since the quarterly issuance programme resumed in 2014. Meanwhile, the equity suffered a massive 69.7 drop in revenue realised for the January to June period to total turnover of Rwf9.04 billion, down from Rwf29.7 billion recorded during a similar period last year. The poor performance hit the Rwanda Share Index (RSI) and All Share Index (ALSI), which shed 33.9 per cent and 3.8 per cent, respectively over the period. Commenting on the poor performance of the equity market segment, Celestin Rwabukumba, the RSE chief executive officer, said it is reflective of what was going on the global equities markets generally. Rwabukumba said equity markets were badly hit by what was happening in the global economy last year, noting the markets have not yet recovered to date. “Though we have seen them stabilising in terms of price decline due to the general economic conditions… This year, investors across markets, including Rwanda, have not been buying much which affects volumes and earnings recorded,” he said. He also noted that some retail investors are “impatient” and want to let go of their shares when prices are on a downward, which hurts share value further. He, however, said “things were beginning to stabilise.” Rwabukumba noted that the fact there are few offshore investors because of the small size of Rwanda market also affects performance in terms of volumes and value recorded. “We expect a few more products to come to the market. That should spur some activity and ensure price stability. Generally, we anticipate moderate performance this year based on available data,” Rwabukumba said. Over Rwf9.8 billion was realised in total turnover over the June to December, 2015 period, up from Rwf8.1 million. During the same period, Bralirwa recorded a total turnover of Rwf4.6 billion from Rwf25.5 million shares traded in 91 deals, and Crystal Telecom pushed 12.8 million shares in 158 deals worth Rwf1.1 billion. Uchumi Supermarkets, Equity, KCB and NMG did not trade during the period under review. Over the last half of last year, Equity Bank recorded a total turnover of Rwf11.3 million from Rwf27,700 shares traded in eight deals. The total number of active investors was 13,861 of which 79 per cent were from Rwanda, 17.9 per cent from East African Community bloc, and 2.9 per cent were from offshore investors outside the region. Meanwhile, Rwanda Stock Exchange equipped staff with anti-money laundering skills to boost their competencies in the field. It is also part of the efforts by EAC bloc exchanges to strengthen capital markets infrastructure to allow seamless cross-border trade in share, as well as real time settlement.

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Bond market records 910% growth in value during first six months of the year