Big plans for Rwanda capital market, including first local public offer

The Rwandan capital markets are set for growth in 2010, including plans for a first local initial public offer (IPO) and developing the Rwandan stock exchange. In an interview with East Africa Business Week (, the Executive Director of the Rwanda Capital Market Advisory Council ( Mr. Robert Mathu outlined what to expect.
The first public offering of shares could come “very soon”, he said: “We are working on BRALIRWA and it will come very soon because it is a big company and it will meet all requirements. However, with small companies, I am looking at two years.” Brasseries et Limonaderies du Rwanda ( is the only brewer and estimated to have 95% market share, as well as the Coca Cola franchise. It is owned 70% by international Heineken Group and 30% by the Rwandan Government. According to previous reports, the Government wants to sell 25% to the public and 5% to Heineken, but was examining applications to be the transaction adviser and sponsoring broker.
Other future transactions could include Government selling shares in cellphone company MTN Rwanda ( and insurance company Sonarwa (, which is estimated by Government to have 75% of all insurance premiums.
The Rwandan Government has also said that it wants to sell off its shares in other profitable firms but Mr Mathu says these companies are not in a hurry to go public: “Many of them may not have all the requirements because they have not bothered. They have had no reason in the past to try to meet the requirements. For example, one of the basic requirements is that a company must provide audited financial statements. In Rwanda, companies used to prepare accounts only to convince the taxman that they are fine. However, this is not enough for us; we have to see what accounting system they are using, the quality of accountancy and their corporate social responsibility.
Rwanda is framing the capital market through 3 pieces of legislation: 1) The law establishing the future Capital Market Authority; 2) A law regulating capital markets; and 3) A law regulating the Collective Investment Schemes (CIS). The market is waiting for a law to split the Rwanda Stock Exchange from CMAC, which established the Rwandan Over-The-Counter market 2 years ago and will continue to be involved, but would also seek to recruit energetic people to develop and run the future RSE.
Mr Mathu says that collective investment schemes (normally pension funds, insurance funds and collective savings plans such as mutual funds and unit trusts) as critical to market development: “CIS contribute a very significant proportion in the development and deepening of the capital market because without a collective investment scheme every investor would invest directly in the market. We needed the law to make sure that investment managers handling the money has the right qualification and that they have to disclose their investment strategies and policies to the public.”
He adds that Rwanda has benefited from membership of the East Africa Securities Regulatory Association (EASRA) and East Africa Stock Exchanges Association (EASEA). It is part of plans to develop an integrated East African capital market and also part of an agreement with the International Finance Corporation to develop this. Mr Mathu said the dual listing of Kenya Commercial Bank shares is a learning opportunity: “KCB cross listing has helped us to assess our system in terms of being able to serve investors by accessing and buying shares. Therefore, it has given us a lesson, we are working on it, and very soon, you will see us conducting our equities business more effectively.” Eventually Rwanda will introduce electronic trading in securities, which is the route for integration with the regional securities market.


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