Business round up

Rwandair signs leasing agreement for two planes In bid to expand its network, Rwanda’s national carrier Rwandair on Wednesday signed a leasing agreement with the world’s largest aircraft leaser General Electric Capital Aviation Services (GECAS).
François Kanimba
François Kanimba

Rwandair signs leasing agreement for two planes

In bid to expand its network, Rwanda’s national carrier Rwandair on Wednesday signed a leasing agreement with the world’s largest aircraft leaser General Electric Capital Aviation Services (GECAS).

The deal will see the national carrier receive two Boeing 737-500s in May and July this year. This will be an addition to an already existing fleet of two CRJ-200 aircrafts.

The initial agreement was signed by Vice President GECAS Ryan Barrett and Chairman and Acting Chief Executive Officer (CEO) of Rwandair, John Mirenge.

The agreement paves way for a long term engagement between the two organizations in the areas of aircraft leasing, maintenance, training and human capacity development.

Speaking after the signing, Mirenge underlined the need for the national carrier to have a strong passenger revenue driven network with the right aircraft to serve the airline’s expansion plans.

He added that the two Boeing 737-500 are expected to be deployed on routes with heavy passenger and cargo demand like Johannesburg while also serving intended Rwandair destinations like Kinshasa. 

“GECAS has a keen interest in making this partnership work and in the near future we will see our organization involved in a number of projects at national level in Rwanda,” Barrett said.

GECAS is a fully owned subsidiary of General Electric which is the world’s renowned jet engines manufacturer.

GECAS is a leading global player in commercial aircraft leasing and financing, with over 1,800 owned and managed aircraft, 23 offices, and more than 245 customers in over 75 countries.
Law for enactment of capital markets set for June

As part of efforts to further boost the capacity of the local financial system, the Central Bank has said that the capital markets are set for further deepening during the course of the fiscal year 2010.

The Governor of the Central Bank François Kanimba said recently that the regulatory and institutional deepening programmes are meant to form the basis of the changes meant to boost the operations of the local capital markets.

”First of all the legal framework is being worked on. The law establishing a capital markets authority is set for enactment before June this year,” Kanimba told Business Times.

The Governor added that the second part of the broad deepening programmes is centred on the diversification of financial instruments in the market apart from the very few government bonds or cross listing of stocks.

”Once undertaken the deepening will be able to create a vibrant capital market,” he added.

Central Bank says that as part of the new measures it has embarked on a new move meant to create different government bonds which will be able to attract different maturity profiles.

According to officials this will serve to create some diversification within the bond market. The deepening process will entail assisting the Capital Markets Advisory Authority (CMAC) to shape the yield curves from the money markets to the bond markets.

”When we manage our daily monetary policy we try to establish a clear link  with the medium to longer capital markets by creating reasonable yield curve depending on the maturity of different financial instruments .

Credit to private sector increases by 25 percent

The Central Bank has said that it has instituted measures to boost private sector lending.

Consequently credit to the private sector has increased by 25 percent during the first quarter of 2010. Provisional statistics by the Central bank for the first quarter of 2010 indicate that lending by the licensed banks has been on the upward as compared to the same period in the fiscal year 2008/9.

The Central Bank says that the new fiscal policy for the year 2010 meant to boost the economy in the wake of the spills of the global financial crisis has started showing positive results.

In an exclusive interview with the Business Times since the launch of the 2010 ‘Monetary Policy and Financial Stability’ statement, Francios Kanimba said that despite the tightening of risk management  lending levels to the economy has increased.

“Tightening the requirements has something to do with improvements within risk management for banks. Actually statistics that I have based on figures for first quarter 2010 compared with 2009 of the same period indicate that total volume of new loans has improved by 25 percent,” Kanimba said.

Central Bank is upbeat that liquidity is on the increase and that this trend will continue for the rest of the year.

“What banks are doing right now which I appreciate, is that they are putting more efforts on recovery of arrears especially non performing loans. While it can be said that banks are increasing their new loans it can also be said that bankers are increasing efforts to recover arrears on bad loans,” he added.

Rwf17.75 billion raised through bonds on Rwanda’s capital markets

A total of Rwf 17.75 billion has been raised through bonds on the Rwanda stock market (ROTC), as of March 2010.

According to statistics from the Capital Markets Advisory Council (CMAC) that show the performance of the market since its inception, three government bonds worth Rwf 16.75 billion each have been issued and one corporate bond from BCR bank worth Rwf 1 billion was issued and they were listed on the OTC market. 

However as the economy awaits the listing of the first Initial Public Offer (IPO) from the BRALIRWA listing the equity market is yet to take off.

Apart from the cross listing of KCB shares last June, the government has decided to sell shares through privatization in a number of companies where it holds shares.

The equity market was also activated in June 2009 with the cross listing of KCB.  Since the cross listing, the ROTC recorded a total turnover of Rwf 13, 952,300 from 84,800 KCB shares traded on the ROTC market in 55 deals.

The shares started at Rwf160 and hit a high of Rwf 172 and a low of Rwf 153 where it is currently trading.

“The list of targeted companies is long, but six of them have been targeted as priority to list on ROTC and one of them, BRALIRWA is at an advanced stage in preparations for the first ever IPO on the ROTC,” said Celestine Rwabukumba the Operations Manager of CMAC.

Trading operations on the secondary market commenced on 31st January 2008 on the Rwanda OTC Market.

“To date, the bond market transacted a total turnover of Rwf624, 300,000 in 58 deals,” Rwabukumba said.