[EDITORIAL] More sensitisation needed about the stock market

The National Bank of Rwanda (BNR) has announced that late this month, it will issue another Treasury bond, the third this year.

The National Bank of Rwanda (BNR) has announced that late this month, it will issue another Treasury bond, the third this year.

Many governments opt to borrow from the public to finance most of their projects, and in Rwanda it is not different.

The latest bond worth Frw 15 Billion will mature in five years and follows closely a 15-year Frw 10 Billion Treasury bond issued in May.

Most of the bonds are gobbled up immediately they hit the market by institutional investors such as banks but the culture is yet to sink in among the population.

Some people are reluctant to invest in bonds due to the misconception that they would be immobilizing huge sums of money for many years before touching the dividends.

This is where the Capital Markets Authority (CMA) comes in. They should increase awareness to inform the public that just like any stock, it can be traded on the Rwanda Stock Exchange (RSE) and its value determined by market forces.

Yes, it is true that RSE has not fully taken root among many people because they find it confusing or complicated.

But that trend can be done away with if the whole operation was broken up in simple language for the common man.

In many developed countries, many people invest their life savings in stocks and it helps shore up a country’s economic prospects.

So CMA and RSE have an uphill task of persuading those who keep their money in mattresses that it is safer and more profitable if it was invested in stocks. But changing the traditional mindset will need quite some efforts.

 

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