Rwanda government papers update

Rwanda has experienced significant growth in T-bills subscriptions in its recent auction, with a sharp rise in overall subscription to 161.9% from 125.9% in the previous auction. This surge in demand has been observed across various maturities, including the 91-day, 182-day, and 364-day T-bills. Gideon Sang, Senior Investment Analyst at BK Capital, attributes this heightened demand to investors seeking safe havens for their investments amidst market uncertainties. The T-bills are considered risk-free, making them an attractive option for investors looking to safeguard and preserve their capital amid high inflation and currency depreciation. With T-bills offering yields of up to 7.9% to 8%, they provide a short-term investment opportunity for investors to preserve their capital effectively. However, Sang notes that the trend of oversubscribed T-bills may be a short-term anomaly driven by current market conditions. Amidst these developments, Rwanda's currency, the Rwandan franc, has been depreciating against major currencies such as the USD, euro, and pound. Sang highlights the import-dependent nature of Rwanda's economy, coupled with high dollar demand and limited dollar inflows as key factors driving the franc's depreciation. Despite the franc's performance, other regional currencies like the Kenyan and Tanzanian shillings have shown relatively stronger performance. Additionally, Sang discusses the telecom sector, focusing on MTN Rwanda's shift from voice to data-driven services. Despite regulatory changes impacting revenue from voice services, MTN Rwanda has seen an increase in revenue from data services, reflecting changing consumer behavior towards data-driven telecom services. Sang anticipates continued growth in data segment revenue, driven by a growing mobile penetration rate and increasing uptake of data services among the population. Looking at Rwanda's equities market, Sang notes a positive performance in the stock market, with high-end Rwanda leading the gains with a 27% increase on a year-to-date basis. The market has maintained an upward trajectory, with the recent week witnessing a 60 basis points increase, largely attributed to MTN Rwanda's performance. Sang expects this positive trend to continue in the near term, supported by the strong performance of key players in the market. Lastly, Sang touches on Rwanda's Eurobond yield movement, highlighting a 42 basis points drop in the Rwanda's 20-year Eurobond. This decrease suggests a positive investor sentiment towards Rwanda's sovereign debt and indicates a favorable outlook compared to trends in the broader East African region. Overall, Rwanda's market dynamics reflect a growing investor interest in safe investment opportunities amidst economic uncertainties, with various sectors showing resilience and potential for growth in the coming periods.