Rwanda: Equities market record muted performance

The equities market in Rwanda recently recorded a muted performance, with both the Rwanda Share Index and the Rwanda All Share Index remaining unchanged. Kevin Karobia, Senior Investment Analyst at BK Capital, shared insights on the market's performance and future outlook in an interview with CNBC Africa. Despite stagnant share prices on key counters like Bank of Kigali and Lariroa, expectations are high as the market gears up for the upcoming half-year earnings season. Last week, Lariroa announced a 3.5 per cent increase in profit after tax, demonstrating resilience in a challenging operating environment. This positive performance is expected to drive market activity and uplift investor sentiment moving forward. On the fixed income front, treasury bills continue to attract investor interest, particularly the 28-day and 91-day papers. Investors are prioritizing short-term gains in the current high-interest rate environment, aiming to minimize duration risk. Meanwhile, the recent acquisition of Koje Bank by Equid Group Holdings has reshaped the banking landscape in Rwanda. The consolidation is seen as a positive step towards strengthening the sector and enhancing competitiveness. The combined entity now holds a significant market share, positioning it as a key player in the market. Equity Bank Rwanda and Koje Bank have also displayed impressive returns, with return on equity figures reflecting their strong performance. The completion of the acquisition is expected to have a tangible impact on market dynamics and pricing competition. In light of recent rate hikes by central banks in the US and Europe, speculation looms over whether the National Bank of Rwanda (BNR) will follow suit. With inflation still above the BNR's target range at 13.7 per cent, a rate increase could be on the horizon to curb inflationary pressures. Energy prices and global oil fluctuations remain key factors that will influence the BNR's decision, as they aim to stabilize inflation within the target range of 2 to 8 per cent. The impending monetary policy meeting will provide more clarity on the central bank's next steps in response to evolving market conditions.