The Rwanda Stock Exchange (RSE) is set to be launched on January 31, as the country’s principal stock exchange, responsible for the daily trading of financial securities.
The launch of the RSE will separate regulatory functions from market operations, where the Capital Market Authority (CMA) will exclusively operate as the industry’s regulator.
Rwanda stock exchange is licensed as a private company operating under the jurisdiction of the Capital Markets Authority (CMA) which falls under the Ministry of Finance and Economic Planning. The RSE will replace the Rwanda Over-The-Counter (ROTC) market and it will create a reliable and active trading system, which allows stockholders to easily trade their stocks without a significant shift in prices.
The establishment of a fully fledged stock exchange will be a milestone in Rwanda’s relatively young and growing financial sector. It is also part of government’s wider plan—which is contained in its long term Financial Sector Development Programme (FSDP)—to deepen the financial sector.
By launching a stock exchange, government is increasing alternative sources for businesses to raise long term capital through the issuing of shares or corporate bonds to the public.
If well regulated, the RSE will increase the financial sector’s ability to raise national savings and conduct intermediation. This will foster economic growth and ultimately reduce poverty through efficient mobilisation and allocation of resources.