Bank of Kigali’s (BK) Initial Public Offering (IPO) of 300.3 million shares is expected to be oversubscribed, a top official in the bank said.
The BK IPO, which is the second in the history of Rwanda, is expected to generate Rwf37.5 billion.
BK’s Chief Operational Officer, Lawson Naibo, told Business Times on Monday that the turnout in first two weeks of the offer is quite impressive.
“We are anticipating that the retail pool is going to be oversubscribed according to the reports from banks and stockbrokers. Banks are reporting huge turnouts of clients buying the shares,” Naibo explained.
President Paul Kagame was one of the first people to buy shares in BK, in a move aimed at encouraging Rwandans to invest in the capital market. He was followed by Prime Minister, Bernard Makuza.
“We also want to follow not only as leaders but also to make sure that the people we lead are following by buying the shares in their bank,” Naibo said.
The IPO is set to close on July 29, 2011 while listing of the shares on the Rwanda Stock Exchange (RSE) is set for August 29, 2011. Each share costs Rwf125.
Naibo also said that BK is facilitating people to buy shares through loans.
“If a client can only afford 30 shares, the bank will be able to facilitate the client by financing the remaining 70,” he explained.
Currently the Bank has embarked on a nationwide education campaign to encourage Rwandans to buy shares.
“At the moment, we are having various shows in different markets. We are mobilising the business people, and common people who are ignorant about the IPO,” Naibo said.
The IPO is part of government's wider strategy to implement its long-term privatisation plan, as well as facilitating the development of the capital market to increase alternative sources of long-term capital for business entities.