Kenya: Investors Snap Up a Quarter of Rwandese IPO

Kenyan investors accounted for a quarter of all applications in the retail pool of the just concluded Bank de Kigali IPO, handlers of the share sale have revealed. Data released yesterday showed the Bank de Kigali initial public offering (IPO) was oversubscribed by close to three times.

An estimated 6,636 small investors applied for the offer, but only a handful of buyers from Uganda and Tanzania participated, according to the Rwanda Capital Markets Advisory Council (CMAC) chief executive Robert Mathu.
Mr Mathu said details on how much money Kenyan investors placed on the stock were not yet available.
The IPO targeted to sell 303 million shares valued at Sh6 billion but by the close of the listing last week, applications worth Sh16.1 billion had come through signalling overwhelming investor interest.
"During the offer period, in the first one week, we had already achieved 100 per cent subscription which is different from the first offer of Bralirwa where people started buying in the last week of offer," said Rwanda finance minister John Rwangombwa through a statement.
The Bank de Kigali IPO did not witness the last minute rush common with other sales.

The Bralirwa IPO was oversubscribed by 274 per cent or Sh7.6 billion dollars against the targeted Sh2.8 billion which was attributed to the strong interest in Rwanda's first listing.
Retail investors for Bralirwa oversubscribed the offer by 129 per cent which is nearly the same as the 128 per cent oversubscription for the Bank de Kigali IPO.
The CMAC had grouped interested investors in the listing of Rwanda's biggest bank into the categories of retail East African, employees and directors, foreign, Rwandese and East African qualified institutional investors.
Foreigners got the lion's share with 40 per cent while employees got 2.4 per cent.
EA and Rwandese qualified institutional investors got 15 per cent each while retail investors got 27.6 per cent of the shares reserved.
Kestrel Capital chief executive Andrew DeSimone said that unlike other listings in regional markets such as Tanzania that are limited to locals, the Bank de Kigali IPO was open to all regional investors, widening chances of a successful uptake.
Faida Investment Bank chief executive Bob Karina said that this was expected due to the size of the IPO being relatively small and coming at a time when the Nairobi Stock Exchange is on a bear run. Analysts view the listing as a rare opportunity to enter Rwanda.The NSE is at its lowest point of the year, having lost 22 per cent of its value since the beginning of the year, a bear run that has wiped out Sh200 billion.
For investors who also wanted to diversify their portfolios and enter the Rwandan market, buying into a bank offered an easy route. "Banks are a good proxy to enter the economy," said Mr DeSimone.
Rwanda's GDP growth stood at 7.5 per cent in 2010, the highest in the region and the bank being the biggest is best placed to reap from this growth.
Mr Mathu said that the growth for the bank also has the potential to grow significantly if there is stability in the Democratic Republic of Congo whose entry point is Rwanda.
Allotment is to be officially announced today and trading will take place on August 29. Other IPOs that are lined up include insurer Sonarwa, Rwandair, MTN Rwanda, Fina Bank and cement maker Cimerwa.