Rwandan market update

Rwanda’s equities and fixed income markets have maintained an upward trajectory, with T-bills remaining oversubscribed in the third week of January. CNBC Africa recently interviewed Kevin Karobia, Senior Research Analyst at BK Capital, to discuss the expected market movements in Rwanda. Despite the recent inauguration of the 47th President of the United States, the markets have remained stable with no significant shake-up observed. Karobia highlighted that while global markets may experience some effects post-Trump's confirmation, the impact on Rwandan markets is expected to be gradual. The increased liquidity in Rwanda's market has led to improved turnover, especially in the fixed income sector. The market's resilience is evident in the oversubscription of central bank bills and bonds, indicating investor confidence and activity in the Rwandan market. Karobia emphasized the positive outlook for the Rwanda All Share Index and RSE, predicting continued stability and improved turnover in equities counters. He anticipates that global investors will turn their focus to frontier markets like Rwanda to seek additional risk-adjusted returns. Large-cap companies with stable dividend yields are likely to attract investors, driving share price growth and market momentum into 2025. The interview also delved into the performance of key market counters such as INM, Abra Leroy, Cimerua, and MTN. INM saw significant activity and a 9.1% increase, demonstrating solid capital gains potential. However, Abra Leroy experienced a slight retreat, but interest in the counter remains high due to its double-digit dividend yield. Cimerua's limited trading activity was attributed to a constrained free float post-takeover, while MTN faced challenges in 2024 due to profit declines following regulatory changes. Karobia expects MTN's revenue growth from sectors like mobile money and fintech to support earnings and boost investor activity in 2025. The discussion extended to equity and NMG stocks, which have shown subdued activity despite recent developments such as acquisitions and new investments in Rwanda. Karobia highlighted the need to stimulate trading activity on cross-listed counters to unlock potential gains for investors. The Rwandan franc's movement was also analyzed, with Karobia noting the currency's depreciation attributed to trade imbalances and a potential impact from a stronger USD under the new US administration. He anticipates ongoing challenges for African currencies as the USD gains strength. In conclusion, Karobia's detailed analysis of the Rwandan markets portrays a picture of resilience and opportunity amid global uncertainties. While challenges exist, particularly in currency movements and certain counter performances, the overall outlook remains positive. Investors and market participants are advised to stay vigilant and capitalize on the potential for growth in Rwanda's equities and fixed income markets.