Renaissance Capital’s entry to boost capital market

Having been involved in some new initiatives within Rwanda’s capital markets recently, Renaissance Capital says it is now setting its eyes on opening fully fledged Rwandan operations before the end of the year. This is very good news for the country’s capital markets and other sectors. A case being the long overdue stimulation of Rwanda’s real estate sector where Renaissance Capital says it wants to build a private city in the outskirts of Kigali. Renaissance Capital is a leading investment bank focused on the emerging markets of Eastern and Central Europe, Central Asia and Sub-Saharan Africa. Partly owned by billionaire Mikhail Prokhorov, the firm offers a full range of investment banking products and services which are needed in Rwanda’s largely virgin financial services market. Renaissance Capital entered Africa in 2007, and has offices in South Africa, Nigeria, Kenya, Zimbabwe, Zambia and Ghana. Investment banking is the collective work done by experts within financial services such as equity and debt sales and trading, corporate advisory, capital raising, research as well as other complex structured financial solutions. Rwanda currently has less than five investment banking firms in an economy that should ideally have more. Such complementary services are needed as the country’s capital markets go through further changes. For instance, Renaissance Capital was appointed as a transaction adviser in the December 2010 Initial Public Offer (IPO) of Bralirwa Ltd and is now closely involved in sale of government’s stakes in The Bank of Kigali, which closed last month. By setting up shop in Rwanda, the firm will bring in its unique strengths into the local market. The firm will no doubt bring the highest standards of operational and regulatory efficiency and integrity into the local market and sectors where it intends to do business. For instance, it aims to apply international banking practices in the country. That brings in the building a private city somewhere in the outskirts of the city. Kigali was recently treated to drama within the real estate sector where a developer was arrested for having swindled his clients. To cut a long story short, the gist of this is that real estate business is very expensive and largely long-term business. As I write this comment, Kigali has never witnessed a real estate developer capable of successfully rolling out a housing estate of say more than 500 units. Yet that is what Renaissance Capital is doing in Kenya. The current crop of real estate operatives in Rwanda have limited capacity in terms of expertise and the financial muscle needed to meet the ever rising demand for houses that is estimated at over 15,000 units annually that is rising yearly. Renaissance Capital in collaboration with a number of investors is developing one of Kenya’s most ambitious real estate projects to date. Known as Tatu City, the project sits on a 1,000 hectare land and it is expected to house an estimated 62,000 residents and offer commercial and recreation facilities, including a football stadium with the first occupants due in 2012. So far, US$100 million has been invested with a target of pumping a further US$250 million to be invested in the next phase. Over time, this is expected to be a multi billion dollar project. A project of such nature, if replicated in Rwanda, will no doubt provide a catalyst needed to boost the counry’s drive towards attracting foreign direct investments. How about stimulating Rwanda’s young capital markets? The stimulation of the coutnry’s nascent capital financial market is largely based on government’s privatisation agenda that has moved into a higher gear with the sale of government’s shares in six companies planned over the next three years. The Capital Market Advisory Council (CMAC) says that among the companies preparing to list at the Rwandan bourse are MTN Rwanda, Commercial Bank of Rwanda, Sonarwa and other businesses partly owned by the government. Investment bankers such as Renaissance Capital are urgently needed in the Rwanda Stock Exchange (RSE) to oil the workings of such complex transactions coming up in such a nascent market in order to add an impetus to the listings and trading activities at the RSE. The author is an editor with The New Times Ojiwah@gmail.com

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Renaissance Capital’s entry to boost capital market