Rwandan market watch

Rwanda's capital markets have shown a promising rebound with equities and fixed incomes meeting investor demand, leading to a remarkable 530 per cent surge in market turnover. CNBC Africa recently had the opportunity to speak with Gideon Sang, Senior Investment Research Analyst at BK Capital, who provided a detailed breakdown of the current market trends and highlighted key counters to watch. Last week witnessed a significant increase in market turnover, with a standout performance as the market turnover soared by over 500 per cent to 220 billion Rwandan francs, as compared to the previous week. This surge was primarily attributed to high trading volumes for Bariloa, Bank of Kigali, and Aindem Rwanda. The momentum continued into the current week, with top counters such as BOK, Aindem Rwanda, and Bariloa maintaining active trading. Investors are expected to show renewed interest in dividend-paying stocks as they await the release of the companies' full-year results for 2024. Despite a slight decline in the RSI and All Share Index last week, key counters like Aindem Rwanda and MTN witnessed a notable decrease in market prices. The performance of BOK also saw a marginal decline, suggesting ongoing challenges in certain sectors. Looking ahead, market analysts anticipate sustained investor interest in key counters as companies reveal their 2024 full-year financial results. The Rwandan franc has faced significant pressure due to high demand for the US dollar, leading to a 1.5 per cent depreciation year-to-date. Various factors such as increased dollar demand, declining export commodities, and external debt repayment have contributed to this trend. Notably, the franc reached unprecedented levels last week, crossing the 1,400 mark for the first time in five years. Despite these challenges, the strong economic performance, robust Q3 numbers, and supportive monetary policies are expected to provide some stability to the Rwandan franc. The fixed income market continues to exhibit strength, with subscription rates exceeding 140% last week. The government's strategic shift towards issuing select T-bills indicates a focus on diversifying maturities. Investors have shown significant interest in these debt securities, driven by attractive yields. While rates have slightly decreased in recent months, they remain relatively elevated compared to the end of 2024. Overall, market sentiment remains positive, with a promising outlook for Rwanda's capital markets. Gideon Sang's insightful analysis sheds light on the current market dynamics and offers valuable insights for investors navigating the Rwandan market landscape.