The Government of Rwanda, on Monday, announced the sale of its Bralirwa shares through an Initial Public Offering (IPO), ahead of its planned official listing on the Rwanda Over-The-Counter (OTC) scheduled for January 31, 2011.
According to the Ministry of Finance and Economic Planning, government has opted to divest its stake in various companies, through the stock exchange as a way of supporting the development of the capital markets and help implement the country’s long-term privatisation strategy.
The government is targeting to raise Rwf17.5 billion from its 128,570,000 shares, offering each share at Rwf136, reflecting a discount of 20 percent compared to the actual valuation of Rwf170 per share.
By enabling Rwandans to access various savings and investment avenues through encouraging ownership of productive companies and assets by small savers, the government is enhancing its own poverty reduction policies.
By helping to strengthen the capital markets, the government is also facilitating businesses to access various alternative sources of long-term capital. A well functioning stock exchange will help companies raise funds for various corporate operations including expansion.
Once listed on the OTC market, Bralirwa shares will have an assigned market value and an investor can resale their stock, enabling them to generate income if there’s a share appreciation.
Rwandans should, therefore, embrace the capital markets because they will help companies to raise capital from the public and shift from the conventional ways of financing business and provide a gate way to Rwanda for global portfolio investors, which is critical in supplementing the low domestic savings.