Rwanda market update

Rwanda's capital markets have kicked off the week with a strong start as equities rallied with the year end drawing near. Gideon Sang, Senior Investment Research Analyst at BK Capital, provided insights on the market performance and key counters to watch for the week. Last week, investors showed significant interest in government papers, particularly T-bills, with high oversubscription across various tenures. Yields saw a slight decline, aligning with global trends of moderating rates to historical levels. Bralirwa emerged as a top performer on the Rwanda Stock Exchange, reflecting increased demand and a price surge to 220 Rwandan francs. The company's impending year-end dividend payout, boasting a yield of over 13%, positioned it as an attractive investment option. With market turnover predominantly driven by Bralirwa, continued interest is anticipated in the counter this week. The financial sector is expected to release Q3 results, with a focus on banking institutions following positive performances from companies like INM. The Central Bank's decision to maintain the benchmark lending rate at 6.5% was influenced by lingering inflation concerns, indicating caution amidst uncertainties. While inflation trends have been relatively stable, future decisions will depend on global market movements and domestic factors. The Rwandan Franc's depreciation against the USD, shedding about 8.5% year-to-date, has put pressure on the currency. However, expectations of diaspora inflows in December and support from the IMF deal are anticipated to mitigate the depreciation. The IMF funding, estimated between $80 million to $120 million, is projected to bolster forex reserves and stabilize the currency, with inflows expected by the first quarter of 2025. Overall, Rwanda's capital markets exhibit resilience amidst evolving global and domestic dynamics, positioning for continued growth and stability.