Rwanda market update

Investors in Rwanda are eagerly anticipating the upcoming earnings season as listed firms in the country continue to release their half-year results. CNBC Africa recently spoke with Kevin Karobia, Senior Research Investment Analyst at BK Capital, to discuss the expected market movements in Rwanda following the recent Monetary Policy Committee (MPC) meeting. Karobia highlighted several key points regarding the market's performance post-MPC and shared insights on the earnings season and the factors influencing the equity and fixed income markets in the country. Following the MPC meeting, there has been a notable shift in market dynamics, with lower interest rates observed on the yield curve. The latest auction revealed rates as low as 8.2% for the 364-day paper, indicating a trend towards moderation in interest rates. This shift is expected to translate into increased private sector credit growth and potentially drive more investor interest in the equities market. Despite a slow start for equities counters, some companies have shown strong performance year-to-date, with Cimero and Bradley recording significant returns. The acquisition of Cimero and other companies has further fueled market activity, signaling a positive outlook for the equities market. As the earnings season unfolds, investors are likely to see strong growth from companies like Ralirwa and INM, which have already reported impressive results. Ralirwa's performance has been particularly encouraging for dividend-seeking investors, while INM has shown significant growth in interest income and loan book expansion. The upcoming release of BK Group's earnings is highly anticipated, following strong quarter one results. However, MTN's profit decline of over 300% in the half-year results has raised concerns, attributed to heavy investments and the delay in realizing expected gains. Despite this, most counters are demonstrating robust performance compared to the same period last year. In terms of market performance, both the equity and fixed income markets are driven by liquidity and investor positioning. The fixed income market remains vibrant, with strong demand for instruments like treasury bills and corporate bonds. However, the equities market faces challenges in turnover, indicating a need for increased investor participation. Factors such as upcoming bond issuances by institutions like BRD and grain miller further contribute to the dynamic market environment in Rwanda. Overall, investor sentiment remains positive, with the market poised for potential growth and opportunities in both the equity and fixed income sectors.