The ROTC market yet to be active — Governor

With the infant financial market in Rwanda making modest progress particularly the primary market, it has been noted that the secondary market is not as active as it should be. According to Francois Kanimba, the Governor of the Central Bank, the secondary market is almost non existent. He asked the Capital Market Advisory Council (CMAC) to give advice on what should be done to activate the stock market. “The problem on the secondary market can be attributed to investors who don’t want to sell their instruments but prefer to keep them until maturity,” he said. Kanimba was launching the sixth government Treasury bond on the Rwanda Over-The-Counter (OTC) market on Friday.He added that at this level of development of the capital market, there is hardly any transaction on the secondary market. The secondary market is always critical for the development of the financial market and the Central Bank is yet to ascertain whether the problem is the interest rate or the volume of products on the market. However, the Executive Director of CMAC Robert Mathu said that the situation is not unique to Rwanda but it is synonymous with young markets. “We hope that as more private investors other than government come onto the market especially the BRALIRWA IPO, we will have a critical mass of instruments hence more activities,” said Mathu. The government through the National Bank of Rwanda issued a sixth treasury bond on the secondary market which had earlier generated Rwf5.1 billion more than the targeted Rwf2.5 billion from the primary market. The bond carries a coupon rate of 9.5 percent which is slightly above the 9.4 percent of the market rating and it will mature after a period of two years. Kanimba also said that the oversubscription means that there is enough liquidity in the financial system and it is the right time for institutions to raise capital through investing in government bonds. Ends

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The ROTC market yet to be active — Governor