COVID-19: RSE CEO on reopening the 15 year Rwanda govt. bond

The government of Rwanda has announced the reopening of a 15-year government bond as part of its strategy to recover from the economic aftermath of the COVID-19 pandemic. This decision comes at a time when many countries are grappling with the financial implications of the global health crisis. In an exclusive interview with CNBC Africa, Celestin Rwabukumba, the CEO of Rwanda Stock Exchange, shed light on the current state of the domestic fixed income bond market and the positive response from investors. Rwabukumba highlighted the attractiveness of the fixed income bond market in Rwanda, citing the favorable returns compared to other available investment instruments. He emphasized the perceived safety net of fixed income securities during times of economic uncertainty, noting that investors tend to gravitate towards this asset class in such situations. The CEO expressed confidence in the ongoing bond subscription, which is set to close with a value of 20 billion Rwandan francs (approximately $20 million). Reflecting on the impact of the COVID-19 pandemic on capital markets across the continent, Rwabukumba revealed that Rwanda Stock Exchange did not experience significant capital flight during the crisis. He attributed this stability to the market's limited exposure to international companies and the resilience of local investors. Despite the challenging global economic conditions, the stock market in Rwanda has remained steady, with minimal fluctuations in share prices. While the equity market witnessed low trading volumes, the fixed income market saw a significant surge in activity. Rwabukumba noted that trading in fixed income securities doubled compared to the previous year, showcasing investor confidence in this segment. The CEO also touched upon the central bank's efforts to encourage investors to participate in secondary market trading, a move aimed at fostering market development and financial stability. Addressing the lack of new listings in the equity market, Rwabukumba highlighted the importance of attracting more companies to the exchange to stimulate trading activity. With only a few new listings in recent years, the equities market in Rwanda has faced challenges in generating momentum. The CEO emphasized the need for fresh capital infusion through initial public offerings (IPOs) and increased listings to revitalize equity trading on the exchange. In conclusion, despite the broader economic challenges posed by the pandemic, Rwanda's bond market continues to show resilience and investor interest. The government's decision to reopen the 15-year bond underscores its commitment to driving economic recovery and attracting investment in the country's financial markets.