More regional companies to cross list on local bourse

Three Kenyan companies are set to cross list on the Rwanda Stock Exchange (RSE), Robert Mathu, the Executive Director of CMA, said Monday. “There are two companies in Kenya that, during their annual general meeting, passed a resolution authorising them to cross list in Rwanda. One is Equity and another is KenoKobil. These two are the major ones, but there is also an investment company, Centum, which owns shareholdings in many other companies,” Mathu said on phone, adding that it is not known exactly when the companies would cross list. “We currently don’t know yet when exactly they will list but, in fact, there are other companies that have passed the resolutions to cross list. When these companies do cross list, investors in Rwanda will have an opportunity to distribute their risks, and in addition, investors also get an opportunity to get more returns on investments.”Currently, the Nation Media Group (NMG) and Kenya Commercial Bank (KCB) are the only regional cross listings and they are from Kenya. Only two domestic companies, Bralirwa and Bank of Kigali are listed on the RSE. Equity Bank, one of the most profitable companies in East Africa, has a regional presence in five countries – Rwanda, Kenya, Uganda, South Sudan, and Tanzania. Since listing in 2006, Equity Bank’s shareholder value has grown tremendously creating immense wealth for shareholders. From a customer base of 27,000 in 1993, the bank is now home to 7.8 million accounts accounting for over 50 per cent of all bank accounts in Kenya. Equity Bank is the largest bank by customer base in Africa with a focus on providing affordable, accessible and relevant products and services at the bottom of the pyramid. According to the bank’s audited financial report for the year ended December 31, 2010, the shareholder’s equity in the bank was valued at approximately US$336.7 million. The group has an asset base estimated at over US$1.5 billion, and shareholders’ equity in excess of US$237 million, as of June 2010. In July, the bank reported that it continued to maintain its growth momentum with the profit before tax growing by 29 per cent to close at Kshs 7.62 billion in the six month period ending June 30th 2012 despite the challenging micro-economic environment characterized by high inflation, interest rates hikes and foreign exchange volatility. Kenya’s top lubricants marketer – KenolKobil Ltd (KNOC) – has an expansive business presence in the country, with its main brands Kobil, Kenol and Castrol dominating the Kenyan market. In June, KNOC shares in Nairobi reportedly jumped by 9.1 per cent to 15.55 shillings by the close, the highest level since at least May 1997. The volume of trading was, reportedly, more than two and a half times the stock’s three-month average.Centum Centum Investment Company Limited (Centum) is the largest quoted investment company in East Africa listed on the Nairobi Stock Exchange (NSE). With over 38,000 shareholders, it is both a provider and manager of funds, and positions itself as an investment channel through which other investors are able to access diversified investments and management expertise for a superior return. Its portfolio is currently valued in excess of US $ 140 million and consists broadly of investments in private equity, listed equity and real estate. The private equity portfolio is the largest asset class, with notable investments in the financial and beverage sectors. Automated trading platformWhile appearing before the Chamber of Deputies’ Committee on Budget and National Patrimony to defend the Rwf1.5 billion allocated to CMA in the 2012/13 budget, in June, Mathu told MPs that the RSE is gearing towards an automated trading platform to attract more foreign companies and boost activity on the nascent bourse. The move will phase out the open (manual) trading system, which the capital market regulator says is unappealing to foreign companies and investors. The RSE is the only unautomated bourse in the East African Community (EAC). The Uganda Securities Exchange, Dar es Salaam Stock Exchange (DSE) and Nairobi Stock Exchange (NSE) have all embraced electronic trading platforms. Burundi is yet to set up a stock exchange.