CMA optimistic about bourse rebound, moves to attract more local investors

The Capital Market Authority (CMA) is optimistic the local bourse will rebound following back-to-back decline in performance over the past two years.

The Capital Market Authority (CMA) is optimistic the local bourse will rebound following back-to-back decline in performance over the past two years.

According to the Rwanda Stock Exchange (RSE) annual report for 2016, the Rwanda Share Index (RSI) for domestic counters dropped to 119.91 points in 2016, down from 146.89 points recorded in 2015. This was largely driven by drop in share value of all the three local counters over the past year.

 

The All Share Index (ALSI) that includes all listed firms on the local exchange, declined from 130.61 points in 2015 to 127.26 points last year. ALSI declined by 3.8 per cent in 2015, while the RSI was down 37.5 per cent.

 

Bank of Kigali counter lost Rwf52 to Rwf228, down from Rwf280 on December 31, 2015, while Bralirwa lost Rwf34 value to close at Rwf140 from Rwf174 on December 31, 2015, and Crystal Telecom declined from Rwf99 to Rwf90 at the end of December 2016. This drop in share affected the bourse returns with RSE total turnover for both the equity and bond markets falling 55.6 per cent to Rwf17.14 billion, from Rwf38.54 billion recorded in 2015. BK counter was at Rwf250 yesterday, Bralirwa at Rwf140 and Crystal Telecom Rwf90.

 

Market capitalisation was at over Rwf2.748 trillion in December 2016 compared to Rwf2.820 trillion as at December 31 2015. It was Rwf2.762 trillion yesterday.

However, the bond market recorded great performance last year, over the reporting period, raking in Rwf1.7 billion total turnover, or an increase of 24.9 per cent in value, from Rwf915.4 million recorded in 2015. This was mainly buoyed by the government’s quarterly bond issuances that aim at raising funds for infrastructure projects and to support the capital market.

The volumes of bonds traded rose by 85 per cent, while the number of transactions were up 230 per cent from 30 transactions in 2015 to 99 last year.

However, CMA is upbeat that the exchange will do better this year thanks to ongoing campaigns to attract more investors on the bourse and the improving situation in the global economic arena.

According to Robert Mathu, the CMA executive director, the tide is changing for the better with more new investors coming to the market, a development he believes could help boost both the equity and bond markets.

He added that more and more Rwandans are increasingly understanding benefits of saving and investing on the exchange.

“Businesses are beginning to realise that they can raise affordable capital. In fact, we are seeing more firms now coming to engage with us. We are also engaging the firms on a door-to-door basis, which we expect will help bring more people on the markets this year,” he said.

Celestin Rwabukumba, the RSE chief executive officer, attributed the bearish situation to “what was going on in the global equities markets in general” that affected performance of markets, including RSE and regional exchanges.

“The challenges in the global economic arena last year affected markets and investor appetite leading to a decline in volumes and earnings recorded,” Rwabukumba said.

Counter performance

Bralirwa recorded a total turnover of Rwf4.3 billion from 27.3 million shares traded in 189 deals; Bank of Kigali raked in Rwf8.05 billion from 30.7 million shares that changed hands in 316 deals, while Crystal Telecom realised a total turnover of Rwf2.9 billion from 37.4 million shares in 387 deals.

All the four cross-listed counters, Equity, KCB, Uchumi Supermarkets and NMG, did not trade during the whole of last year.

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