Investors’ appetite surge as Government sells stake in I&M Bank

It was first-come-first-served, yesterday in Kigali as Government announced sale of its stake of 19.81 per cent in I&M Bank (Rwanda) Ltd to the public through an Initial Public Offering and subsequent listing on the Rwanda Stock Exchange (RSE). Wasting no time, Simba Supermarket went in first for the application forms followed by Andre Bitwayiki, the president of the Private Sector Federation (PSF) in the City of Kigali. These were among the many investors who expressed appetite for the IPO issued through the Ministry of Finance and Economic Planning. Irwin and Gatete cheer after unveiling the prospectus for the IPO yesterday. / Timothy Kisambira The investors are confident that this particular bond is a safe haven for their money and, therefore, worth investment. Jean-Bosco Munyampeta, a Kigali-based investor, said he is going for the catch because it presents an ideal opportunity to invest for his children. “We are excited about the offer and confident it is the best way to save and invest money,” he told The New Times minutes after Claver Gatete, the minister for finance and economic planning, made the announcement yesterday. I&M Bank board chair Bill Irwin said through bonds and stock markets, government will be able to mobilise the highly needed resources to transform Rwanda economically. Finance Minister Claver Gatete chats with I&M Bank Board Chairman Bill Irwin during the Initial Public Offering for I&M Bank yesterday. / Timothy Kisambira Irwin lauded Rwanda’s political stability, peace and security as some of the factors responsible for the increased appetite for investors to come and do business in the country. “Investing in such a product is the right way to go for the public,” he said. I&M Bank Board Chairman Bill Irwin speaks during the Initial Public Offering for I&M Bank yesterday. / Timothy Kisambira Divestiture Meanwhile, according to Gatete, the share sale offer is in accordance with the Government of Rwanda’s policy of divesting from public enterprises. The total number of offer shares in this particular case is 99,030,400, representing 19.81 per cent of the issued share capital of I&M Bank Rwanda Ltd. Finance Minister Claver Gatete gives his remarks during the Initial Public Offering for I&M Bank yesterday. / Timothy Kisambira The Government owned a 19.81 per cent stake in I&M Bank. “The Government of Rwanda is committed to the development of the capital markets as a means of building a strong foundation for lon-term financing for both private and public sector and also empowering the people of Rwanda to participate in the divestiture of government investment in private organisations,” Gatete said, adding that to have the Government shares in the oldest bank in Rwanda sold to the public is a confirmation of government’s confidence in I&M Bank in particular and the financial sector in general. What is in the offer? According to the Ministry of Finance, all the proceeds of the sale will accrue to the Government of Rwanda with I&M Bank not permitted to receive any proceeds from the offer for sale. Guests follow proceedings during the launch. And as part of the share offer, 5,000,000 new shares were created to be allotted to the bank’s employees through the Employee Share Offer Programme, which according to Minister Gatete, should encourage and reassure the public to invest in the offer. The offer period commenced Tuesday at Rwf90 and is expected to end on March 3, 2017. *** Why is govt selling stake in I&M BANK? According to Finance and Economic Planning minister Claver Gatete, it is within the Government’s interest to encourage investment of shares of successful companies amongst the citizens of Rwanda, and promote the development of the country’s capital markets. The Government is pursuing a divesture programme of state-owned enterprises, which kicked off in 1997 with a total of 72 institutions earmarked for privatisation/divestiture. The objective is to reduce the shares held by government in public companies and thus alleviate the financial burden on its resources and reduce its administrative obligations in the enterprises. And, in this particular case, government expects about Rwf11.5 billion from sale of its stake in I&M Bank Rwanda. The money will be invested as initial equity in the construction of Bugesera International Airport in Bugesera District. This is the third time the government is listing its shares in an enterprise, following Bralirwa, the country’s oldest beverages maker and Bank of Kigali. In total, there are four locally listed companies on Rwanda Stock Exchange, including MTN Rwanda that trades shares through Crystal Telecom, a subsidiary of Crystal Ventures Ltd. Roabert Mathu, the executive director of Capital Markets Authority, hailed the Government’s offer, adding that it will raise investor confidence in the country. Celestin Rwabukumba, the chief executive of Rwanda Stock Exchange, welcomed the move, describing the listing as another confirmation that country’s debt market is now “up and running.” He said they have seen some interest from local companies looking to issue IPOs and corporate bonds, which is a good signal of a growing market. editorial@newtimes.co.rw

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Investors’ appetite surge as Government sells stake in I&M Bank