Rwandan market update

Rwanda’s equities and fixed income markets have been on a winning streak, with T-bills remaining oversubscribed as investors continue to show interest in the market. CNBC Africa had the privilege of interviewing BK Capital’s Senior Investment Analyst, Kevin Karobia, to discuss the latest updates and expected market movements. Karobia highlighted that the equities market is expected to maintain its upward momentum, with investors particularly eyeing the Brandirwa coin, which has been offering double-digit dividend yields. While the dividend yield has slightly decreased to around 3% due to rising prices, Karobia anticipates a rally in the market as investors await the full-year results of Brandirwa for 2024, scheduled to be released by the end of March. The positive outlook for the equities market comes after a 1% increase in the Rwanda share index and a 0.3% uptick in the oil share index last week. Moving on to the fixed income market, Karobia discussed the significant liquidity in the banking sector, which has persisted since the end of the previous year. The Banking of Rwanda (BNR) recently conducted on-market operations, offering a 28-day central bank paper to absorb excess liquidity in the banking sector, which was oversubscribed. Karobia emphasized that the banking sector is expected to drive T-bills activity in 2025, with many banks leaning towards the shorter end of the curve. He also projected sustained gains in the banking sector, fueled by strong performance in the previous quarter and anticipated fourth-quarter results. Additionally, Karobia noted an increase in market turnover, signaling growing investor participation and potential rallies on certain counters, such as Brandirwa and banking stocks. Despite a 0.3% decline in the Rwandan franc's value this week, Karobia remained optimistic about the currency's performance. He pointed out that while there may be some depreciation, interventions by the BNR and expected receipts from organizations like the IMF and World Bank are likely to support the currency. Karobia emphasized that the Rwandan franc is not on a free fall and predicted a milder depreciation compared to previous years, especially as the country enters a period of reduced import activity. Overall, the outlook for Rwanda's equities and fixed income markets appears positive, with investors and analysts like Kevin Karobia expressing confidence in continued growth and stability.