Rwanda market watch: Treasury bills remained oversubscribed

Rwanda’s fixed income and equities market has been on a solid trajectory, with Treasury bills remaining oversubscribed as investors show a strong demand for Government paper. Gideon Sang, Senior Investment Research Analyst at BK Capital, provided insights on the market performance and key counters to watch as December unfolds. Last week, the T-bills continued to be highly oversubscribed, attracting significant investor interest due to the high yields offered in comparison to historical levels. Notably, the 1981 paper garnered substantial attention from investors, with oversubscriptions exceeding 300% in the last month. Additionally, the government issued two bonds last month that also experienced oversubscription, indicating a favorable market sentiment in the fixed income segment. In the equities market, BOK counter saw a 1.6% gain last week, driving the market on an upward trajectory. Looking forward, investors are keenly observing counters such as BOK, Bariloa, and Simerwa for potential growth and interest. Amidst the market dynamics, Gideon underlined the significance of high dividend-paying counters like Raliruwa and the need for continued investor interest in these segments. Raliruwa, with a dividend yield of 14% and a remarkable 27% year-to-date performance, remains a focal point for investors. Moreover, BOK's declaration of interim dividends following Q3 results further underscores the positive market sentiment surrounding dividend payouts. The three top-performing counters - BOK, Raliruwa, and Simerwa - are likely to sustain investor interest in the upcoming period. INM Rwanda saw heightened market activity last week, driven by expectations of dividend payouts and potential price increases. The Rwanda All Share Index (RSE) has maintained a positive trajectory this year, propelled by the strong performance of key counters. Notably, the positive performance of Raliruwa, Simerwa, and BOK has contributed to the indices' upward trend, with expectations of closing the year on a positive note. Despite the challenges faced by the Rwandan franc, including high demand for the dollar, the currency has exhibited a lower depreciation rate compared to last year. With a depreciation of 8.7% year-to-date (an improvement from 18% depreciation in the previous year), the franc remains under pressure but is expected to be supported by exports and an IMF deal set to bolster the currency. Overall, Rwanda's financial markets are displaying resilience and attracting investor interest, setting a positive tone for the year-end and beyond.