Impending sale of Crystal Ventures’ stake in MTN excites capital market

The impending initial public offer (IPO) of Crystal Ventures’ 20 per cent stake in MTN Rwanda will invigorate activity at the local bourse when it is eventually unveiled, dealers and sector experts have said.
Kayonga says the public will be informed on the IPO schedule at the right time. The New Times / File
Kayonga says the public will be informed on the IPO schedule at the right time. The New Times / File

The impending initial public offer (IPO) of Crystal Ventures’ 20 per cent stake in MTN Rwanda will invigorate activity at the local bourse when it is eventually unveiled, dealers and sector experts have said.

“When it happens in the coming months, it will be a boom to investors as we have not had an IPO for past two years now,” said Shehzad Noordally, the CDH Capital general manager, a brokerage firm at the Rwanda Stock Exchange.

Crystal Ventures, an investment arm of the Rwandan Patriotic Front (RPF), was established in 2009.

Apart from the 20 per cent stake in MTN Rwanda, the firm has interests in real estate development, construction and civil works, telecoms, security services, building materials, furniture, as well as agro-processing.

Jean Aime Habimana, a stock broker with Standard Bank Group Securities in Kigali, said that if the shares are floated on the stock, they would perform well “considering that MTN is the leading telecom company in Rwanda and that other listed domestic companies’ shares are doing well”.

“It will be a good boost for the stock market. Investors like being availed with a number of options to choose from,” he said.

It is not yet clear how many shares the company wants to sell to the public, and the amount of money they are targeting to raise from the sale.

“If MTN was to go public, it would mean more opportunities for investors, and this could make the stock exchange lively,” said Bosco Gatanazi, a broker with African Alliance.

Market capitalisation is the total value of the issued shares of a publicly traded company; which is equal to the share price times the number of outstanding shares.

Olivier Muneza, a broker with MBEA Brokerage Services, pointed out that MTN Rwanda’s initial public offering would bolster its presence in the telecom sector, noting that investors buy shares in companies that perform well in their specialties.

“MTN Rwanda is well established. It performs well in the telecommunications industry. People would be more than willing to own part of the company once the shares are listed,” he said.

He added that, just like Bralirwa and Bank of Kigali whose shares were currently doing well, the telecommunications company would also succeed on the local bourse.

However, Crystal Ventures are still tight-lipped on the eventual listing date of the company’s shares in MTN Rwanda, arguing that the public will get to know when the right time comes.

“It is still premature to say anything right now. The company will communicate in case of any development,” said Jack Kayonga, the Crystal Ventures Group executive chairman, in a phone interview.

Robert Mathu, the Capital Markets Authority boss, confirmed to this newspaper yesterday that Crystal Ventures had expressed interest in selling its stake in MTN Rwanda, but added that the firm has not yet lodged a formal application with the authority.

“Certainly, if the negotiations are completed and we know the value of the shares, it will help in the capitalisation of the stock exchange, stirring up investment opportunities and activity,” he said.

 Insiders at the Authority say the company could float the shares as early next month or latest, early next year, if it gets the necessary approval from the regulator.

Noordally explained that if the company was to announce its plans to join the stock market right away, this would likely cause a ‘crash’ on the stock market.

“Such an announcement would influence many investors to start selling their shares in the listed firms as they prepare to buy Crystal Ventures’ MTN shares,” he explained.

He, however, said that it was important for the public to know early and prepare to invest in the company shares.

“Instead of spending a lot during the festive season, one is advised to invest in the stock market which at the end of day builds their portfolio,” he said.

In 2011, both the government and Crystal Ventures relinquished 25 per cent shares for undisclosed amount to the MTN Group.

Initially, government and the regulators were in final stages of floating their shares to investors but the stake was acquired by MTN Group as majority shareholders.

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