EDITORIAL: Rwanda’s Capital Market needs to up its game

Rwanda Stock Exchange staff during the presentation./ File

When it comes to the world of stock markets, many people, not just Rwandans, are in the dark. Many would rather sew their money in their mattresses and the idea that someone can place their money in unpredictable stocks waiting for annual returns is very foreign.

Many business people would rather go down a tested route; that of buying and selling at a profit.

 

Rwanda Stock Exchange (RSE) is pretty small compared to neighbouring countries that have capital markets. Just last week, there were only eight players of the market, nothing much to write home about.

 

However this week saw some action with the entrance of a South African investment firm and a local cement manufacturer into the market.

 

However, just to show that financial literacy is not Rwandans’ very strong point, when the cement company made its initial appearance on the market, over 340 million shares were on offer, but to the surprise of many, only 6,000 were snapped.

That is quite unusual for a company that shortlists for the very first time because usually shares are oversubscribed, meaning that demand largely outstrips supply. It is an indication that the Capital Markets Authority still has a lot to do in terms of educating the masses.

It is true that it usually carries out sensitization campaigns, especially among the youth such as the annual Capital Market University Challenge, but that is just scratching the surface.

Rwanda’s economy is always on the upward trend and further growth could be fueled by an active and vibrant stock market. But before we arrive at that stage, a lot of sensitization will be needed.

editor@newtimesrwanda.com

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