At exactly 9:05am yesterday, a bell chimed in the auditorium at Kigali Serena Hotel. The Minister for Finance and Economic Planning, Claver Gatete, who was overseeing the listing of I&M Bank Rwanda on the Rwanda Stock exchange (RSE), was officially opening the function.
He was accompanied by the Chairperson of Rwanda Stock Exchange, Dr James Ndahiro, Board chair of I&M Bank, Bill Irwin, and the new shareholders.
Gatete said sale of the Government’s stake of 19.81 per cent in the bank was a success and an important milestone toward building a strong capital market base.
The Initial Public Offering (IPO) was, according to the minister, oversubscribed by 209 per cent with investors from more than seven countries rushing in to have a slice of the pie through an IPO that was subsequently listed on the stock exchange.
The listing means that Rwanda’s oldest financial institution officially became a public entity. Irwin confirmed the development that saw I&M Bank receive 1,092 applications representing seven countries from across the globe.
This is the third time the Government is listing its shares in an enterprise, following Bralirwa, the country’s oldest beverage maker, and Bank of Kigali.
Having successfully divested from the bank through the IPO, the next step is to list the stock at the Rwanda Stock Exchange (RSE) with effect from today, Gatete said, adding that the official listing caps another success of the Government’s privatisation programme.
He added the successful sale programme of I&M Bank Rwanda Ltd, which is part of the primary trading activity of the shares, gives the Government the impetus to fast-track the process of bringing more public shares to the stock market.
“The outcome of the primary share sale is a clear indicator of confidence that investors have in our economy,” Gatete added.
Dr Ndahiro said the successful sale reflects consistency and demonstrates the Government’s commitment to capital markets.
He urged the Government to bring more assets to the stock exchange as a means of mobilising resources for long-term investment.
Celestine Rwabukumba, the chief executive of Rwanda Stock Exchange, said the listing of I&M Bank Rwanda shares is likely to increase trading activity at the bourse.
“The listing today [yesterday] kick-starts the secondary trading activities of I&M Bank Rwanda shares on the RSE,” said Rwabukumba.
“The secondary trading is likely to stimulate market activities at RSE through offering investors more options. This listing is likely to attract new investors into the market.”
He said attracting of new investors was “very likely” considering the fact that the shares were oversubscribed at the primary market.
“New investors are also likely to trigger high demand for the I&M Bank Rwanda shares upon its listing,” Rwabukumba said.
And, as part of the share offer, five million new shares were allotted to the bank’s employees through the Employee Share Offer Programme, which, according to Minister Gatete, was to encourage and reassure the public to invest in the offer.
The IPO was officially opened to public at Rwf90 on February 14, with the minimum shares one could buy set at 1,000.
In total, the Government shares floated were about 99,030,400.
Why govt sold stake in I&M Bank
According to Minister Gatete, it is within the Government’s interest to encourage investment of shares of successful companies amongst the citizens of Rwanda, and promote the development of the country’s capital markets.
The Government is pursuing a divesture programme of state-owned enterprises, which kicked off in 1997 with a total of 72 institutions earmarked for privatisation/divestiture.
The objective is to reduce the shares held by government in public companies and thus alleviate the financial burden on its resources and reduce its administrative obligations in the enterprises.
And, in this particular case, the Government expected about Rwf11.5 billion from sale of its stake in I&M Bank Rwanda.
The money will be invested as initial equity in the construction of Bugesera International Airport.
I&M Bank Rwanda listing brings the number of firms listed on the exchange to eight, four of which are local and four cross-listed counters, including Bank of Kigali, Bralirwa, Crystal Telecom, Nation Media Group, Uchumi Supermarkets, Equity Bank, and KCB.
Robert Mathu, the executive director of Capital Markets Authority, hailed the listing, saying it will raise investor confidence in the country.