Capital Markets

Interest in Rwanda bourse rises as second IPO planned

Technicians inspect beer bottles on a conveyor belt at Bralirwa's brewery in Gisenyi, Western Rwanda. Photo/FILE
Technicians inspect beer bottles on a conveyor belt at Bralirwa's brewery in Gisenyi, Western Rwanda. Photo/FILE 

The Rwanda Stock Exchange (RSE) is ready for its second initial public offering (IPO) after the successful Bralirwa IPO confirmed that the market is able to handle future listings.

The Bralirwa IPO was oversubscribed by 174 per cent and on Monday, the first day of trading, the share price rose by 62 per cent from Rwf136 (Sh18.75) to Rwf 220 (Sh30) but has since gone down to the Rw180 (Sh24.35).

Market players say that the results confirm that the country’s young stock exchange can raise funds for other IPO’s that are in the pipeline.

“The IPO will help attract new funds for investing in the future growth of the Rwandan national economy and is another testament to the country’s high potential as an investment destination,” said Renaissance Capital head of investment banking (Africa) Patrick Mweheire.

Bank de Kigali’s IPO is scheduled next. It is expected to be listed by the end of the second half of this year.

Eric Musau, a research analyst at African Alliance, said that despite initial challenges the offer went well.

The IPO, he said, was a benchmark for future IPOs and following its success interest is high.

Liquidity problem

There is, however, a liquidity problem with only 2,000 shares having been traded on the first day.

But Rina Hicks, head of operations at Faida Investment Bank, said that as the brewer’s price rises there is likely that more shares will be released on the market.

The Bralirwa offer was open to both domestic and international investors and a total of 128,570,000 shares representing 25 per cent of the company’s shares were sold by the government which owned 30 per cent.

Leading brands

The remaining five per cent was sold to Amsterdam-based brewer Heineken NV whose total stake in 70 per cent.

Bralirwa brings to three the number of listed companies on the Rwandan bourse, with Kenya Commercial Bank and Kenya’s Nation Media Group making the other two listed shares.

MBEA Brokerage Services Rwanda acted as the lead transaction advisor and Russian-based Renaissance Capital was the co-transaction advisor.

Bralirwa is the sole producer of beer and sparkling beverages in Rwanda and sells leading brands such as Guiness, Mützig, Amstel, Heineken, and Primus with 94 per cent market share.