Rwandan market update

Rwanda’s Capital Markets have started the week on a positive note, showcasing heavy liquidity after the Central Bank decided to reduce the repo rate by 50 basis points in late August. This move has set the tone for a flourishing market, with investors showing strong participation in recent auctions for treasury bills. The high liquidity in the market has been further fueled by a substantial coupon payment session towards the end of August, ensuring a steady flow of funds. The addition of two corporate bonds, MAUI and BRD, have only contributed to the already abundant market liquidity. The recent listing of a 5 billion bond by an SMB in the fixed income segment has been a significant development, signaling the growing interest of market players in supporting the capital market. This move has opened doors for more SMEs to explore capital market opportunities, provided they meet the required governance standards and regulations set by the Rwanda Stock Exchange. The potential for more local listings and the anticipation of mature companies making their market debut have raised expectations among market participants, aiming to boost investor confidence in the Rwandan stock exchange. Exploring equities performance, the market saw MTN Rwanda as the only underperformer last week, shedding 0.6% in value. However, analysts believe there is untapped potential for the company to reverse its performance trajectory. While most counters remained relatively stable, the focus of investors has largely been on the fixed income market due to the attractive rates. With the gradual decline in baseline rates, experts predict a shift in investor focus towards positioning themselves strategically ahead of the full-year results for listed counters. On the currency front, the Rwandan franc has shown resilience with minimal fluctuations, attributed to improvements in key sectors such as agriculture and mining contributing to foreign currency earnings. Although depreciation persists, the outlook remains positive, with expectations of a gradual rate of depreciation due to a persistent current account deficit.