The cross listing of KCB on the Rwanda Over The Counter Market is a new opportunity to Rwandans who want to have a say in the way their savings are invested and are ready to risk a little for the potential benefit of good profits.
The stock exchange is as interesting as it can get. This is because it gives an opportunity to average citizens with limited financial knowledge to play big business by trading in shares of blue chip companies that they otherwise would never dream of owning.
The path that KCB has charted will soon be followed by many a confident corporate entity and sooner or later, it will become an investor’s dream.
East Africans are generally an entrepreneurial lot with a record number of business start ups even though most of them do not make the first anniversary and this entrepreneur culture has spread into the respective stock exchanges of their countries.
In Kenya the listing of power producer KenGen and later the most profitable company in Kenya, Safaricom, the ordinary citizen’s thirst for a prized share of a big company as thousands of people from rural areas filled bused and jammed banking halls and other places to buy shares.
In Uganda the Initial Public Offer of Stanbic Bank which had purchased the former government-owned Uganda Commercial Bank aroused a lot of local attention and surprisingly more foreign participation from Kenya than earlier anticipated.
This excitement in the stock exchange was a result of the first few stock exchange billionaires who picked a keen interest in trading stocks when the practice was largely unheard off.
As a form of savings the stock market is a place where one can see their money grow by taking the advice of professional stock brokers in buying and selling stocks of different companies which will ensure safety in diversity of one’s investments.
Also all over the world the economic health of a country is usually gauges by the performance of the country’s stock market.
In the current global recession, the direction of stocks and securities on the major stock exchanges in the world is variably but usually affected by the economic news coming out of respective countries and the companies that have a large impact on the economy.
So as much as the Rwanda OTC market is still young, companies that feel that they have the consumers’ confidence in them and their ability to be a profitable unit will seek to exploit this confidence by raising more capital on the stock market.
The drama that is usually consigned to the business news of international television stations where after a crucial economic event like the announcement of more job losses in the United States and the effect of the imminent collapse of General Motors on its German arm and how investors on the stock market will react will soon grace the trading floors of our own bourse.
For example the performance of the new KCB shares in Rwanda is already drawing attention in Kenya to the effect that in a just a few days, the share price of KCB on the Nairobi Stock exchange has seen a decent increase.
But as adrenalin-packed and as promising as the stock market promises to be it is important to realize that each investor is actually dealing with their own money and hence the necessity to maintain a clear head when making financial decisions.
On the stock exchange, you can win or lose just as a company can win or lose. Stockbrokers are there to assist investors to make wise financial decisions but at the end of the day it is always important to invest in what you know.
However, the days when the only place to keep your prized savings away from the middle of your mattress was a bank account with fixed annual interest rates are about to end.
In the stock exchange, your savings can grow ten-fold in a year (or decrease by a similar margin). In Africa and the world over, many of the self-made billionaires are usually businessmen who have built up large profitable companies and gone ahead to sell them on the stock exchange at a premium price and instantly became rich.
Aliko Dangote, Nigeria’s first billionaire managed to achieve that feat when his sugar-production company listed on the Nigerian stock exchange in 2007.
The trader who built his Dangote Group into conglomerate with interests in sugar, flour milling, salt processing, cement manufacturing, textiles, real estate, and oil and gas is now the third richest person of African descent in the world behind Mohammed Al Amoudi ($9.0 billion) and Oprah Winfrey ($2.7 billion.) according to the Forbes, the influential American magazine that lists the world’s richest people annually.