Rwanda market update

Rwanda’s equity and fixed income markets have faced a challenging start to the week, with concerns lingering over the ongoing tariffs war between China and the USA. Despite the sharp volume drop and risk sentiment in the broader market, Rwanda has managed to weather the storm with modest equity losses. Gideon Sang, Senior Investment Research Analyst at BK Capital, shed some light on the factors contributing to this resilience and shared insights on key sectors to watch in the Rwandan market. While many markets in the region have experienced a downturn following the announcement of tariffs, Rwanda's market has shown relative stability. Sang attributed this resilience to the illiquidity of Rwanda's market, which has helped prevent a deeper sell-off. Despite a significant decrease in turnover, sectors like banking and BRARILUA have shown positive movements, indicating a different market landscape compared to other regional markets. With the US-China tariff war dominating headlines, Sang highlighted that Rwanda's direct exposure to China is limited, both in terms of trade agreements and export volumes. However, he acknowledged that the global impact of the tariffs could eventually trickle down to the Rwandan market, especially if trade relations with other countries are affected. He emphasized the importance of diversification for market players to mitigate potential risks. Looking ahead, Sang noted that Rwanda's market players are yet to fully factor in the implications of the tariffs due to the slower reflection of such developments in the local market. While other regional markets have felt the impact more strongly, Rwanda's market, with fewer heavily invested counters, has seen a delayed reaction. Sang encouraged the government to explore partnerships with countries in Europe and Asia to enhance trade relations and offset any potential effects of the tariffs. In terms of resilience among other markets in the region, Sang acknowledged the challenges faced by Rwanda in the current market environment. With a limited number of actively traded counters, Rwanda's market may take longer to fully reflect external developments. Sang highlighted the need for continued market development and increased listing activities to improve liquidity and overall market performance. Despite uncertainties in the global economic landscape, Rwanda's markets have demonstrated a degree of resilience amid ongoing trade tensions. As market players navigate the evolving market conditions, diversification and strategic partnerships remain critical for safeguarding Rwanda's financial stability and growth.