VILLAGE URUGWIRO - President Paul Kagame, yesterday, bought shares in the ongoing Bank of Kigali’s (BK) Initial Public Offer (IPO), a move that is set to encourage Rwandans to invest.
Speaking to reporters at Village Urugwiro, BK’s Managing Director James Gatera said the President’s symbolic share purchase is also aimed at supporting the growth of the country’s budding stock exchange.
“The President bought shares in BK as a move to support our young capital market but also lead by example to Rwandans, so that we can have the culture to save and invest,” Gatera said.
The size of investment made by the President will remain confidential as part of the bank’s responsibilities to keep shareholder’s information confidential, he said.
With each share selling at Rwf125, the IPO is expected to generate Rwf37.5 billion from 300.3 million shares. The minimum application is 100 shares
Government floated 133,467,400 ordinary shares or 20 per cent of its stake in BK. This is additional to the 166,837,000 shares that are also being offered by the bank.
The IPO is part of the government's wider strategy to implement its long-term privatisation plan, as well as facilitating the development of capital market to increase alternative sources of long-term capital for business entities.
The Bank has embarked on a nationwide education campaign to encourage Rwandans to buy shares. Gatera said that the international pool was oversubscribed 3.5 times.
“I do believe that this was an example to East Africans, that this is a good asset to invest in. The returns will be overwhelming,” he said.
Robert Mathu, the CEO of the Capital Markets Advisory Council (CMAC) said the government is determined to see local companies grow and get listed on the stock exchange.
He added that Bralirwa’s IPO, which was the first in the country’s history, was successful and will pave the way for more.
The offer will close on the July 29 while the announcement of the allotment results will be made on August 12, 2011.