Last week the Rwanda Over The Counter (OTC) market was silent as no transactions were recorded on the country’s sole bond market, something experts say is a result of investors’ traditional tendency of holding cash during the festive season.
At the close of business on Friday December 19, 2008 there were Rwf2 billion worth of government bonds on offer for sale at Rwf99.8 and two bids (buyers) for the same bonds worth Rwf2 billion and Rwf5 million at Rwf94 and Rwf97.80 respectively.
There were also BCR bank bonds worth Rwf150 million on offer at Rwf100.50 but did not attract bids. According to Pierre Celestin Rwabukumba, Operations Manager Capital Markets Advisory Council, an institution responsible for the development of capital markets in the country, the silence in the domestic securities market is an indirect reflection that traditionally the investment markets are usually quiet as the Christmas festive season approaches.
He also said that it is a result of the low moment for capital markets across the globe as the world reflects on the encroaching global recession and credit squeeze.
“Governments, especially in the western markets have cut interest rates in a bid to encourage lending to boost consumer spending as a way of counteracting the effects of the credit crunch. Global markets are still jittery and are likely to expose their appetite during the first quarter of the New Year,” he said in a weekly market statement.
Meanwhile, in the domestic money market, the National Bank of Rwanda (NBR) announced the results of the 13 week Treasury bills on Thursday December 18, 2008, reflecting an under subscription of 86.1 percent. The bank received Rwf417 million at an average rate of 7 percent against a target of Rwf3 billion.