The Capital Markets Authority (CMA) has trashed the assumption that lack of Initial Public Offers (IPOs) through the government’s projected privatisation programmes is likely to frustrate investor appetite at the Rwandan bourse.
Speculation has been rife on the backdrop of government’s announcement to shelve the expected sale of its shareholding in various companies would dampen activities at the RSE.
In response, top CMA officials told The New Times that RSE is working on two other value drivers meant to grow the local capital markets, rather than narrowing their activities to IPOs.
“We are going to focus on other alternative areas of growth. Apart from IPOs, we are looking at cross-listing of companies arising out of regional integration and secondly, we will work on bringing private sector companies in Rwanda on the stock market,” CMA Executive Director, Robert Mathu, said during an exclusive interview.
He disclosed that the RSE is working on a new programme to bring on board private and family owned companies to interest them to consider the capital markets as a new way of raising capital and expanding, if at all, they are ready to open up to certain requirements.
“We have to remember that in any economy, the majority of businesses are private or family owned. While we are not thinking of engaging many companies in this new move, the few that come on board will be offered equally new avenues of growth such as issuing bonds rather than offering sale of shares,” Mathu added.
“The first process of engaging such companies is for CMA to develop what is termed as “disclosure guidelines,” he said.
The guidelines are not as rigorous as those required of public companies, he said.
“We are bringing down the bar and requirements to enable such companies to come on board. While doing so, we will notify the public as to the correct risk profile of such companies”.
CMA says that three new companies, all from Kenya, have expressed interest in cross-listing at the RSE.
While officials there could not divulge details of the new cross-listing, reports indicate that Equity Bank had during its last Annual General Meeting passed a resolution to cross-list its stocks at all regional bourses, including the RSE.
Another company that has reportedly looking to cross list is a leading Kenyan private equity firm, Centum Investments Ltd.