Rwanda market performance update

In the world of finance, stability is often a sought-after attribute. For Rwanda's market, stability was the name of the game last week as the Rwanda Share Index (RSI) and All Share Index (ALSI) remained unchanged at 120 and 145, respectively. To shed light on the factors contributing to this consistency and provide insights into what to expect this week, Kevin Karobia, Senior Investment Analyst at BK Capital, recently joined CNBC Africa for an interview. Karobia noted that while there was a muted performance in the equities market on a week-on-week basis, the year-to-date figures painted a more positive picture. Both the RSI and ALSI were up, with the RSI showing a 6.9% increase and the ALSI up by 1.7%. The analyst attributed this performance to a mismatch between supply and demand on various counters. One of the counters experiencing heightened investor interest was Kralirwa, where investors were positioning themselves ahead of the Q3 results announcements. The improved performance in the first half of the year fueled speculation that dividends could be higher than in the previous year, prompting investors to make strategic moves. A similar trend was observed with BK Group, as investors sought to capitalize on potential interim dividend announcements that could impact full-year dividend payouts. Conversely, on counters like MTN, a different dynamic was at play. Some investors were looking to capitalize on higher prices by taking profits and exiting their positions, leading to a decrease in turnover. This tug-of-war between profit-taking and entry at advantageous price points contributed to the overall market stability. Karobia highlighted a significant turnover observed on Thursday, driven by a block trade on the BRD second tranche in the fixed income market. With a traded volume of approximately 267 million Rwandan francs, the fixed income market demonstrated robust activity. Looking ahead, the analyst anticipated increased activity in the fixed income market, particularly in the primary auctions for treasury bills that have been consistently oversubscribed in recent weeks. Amidst the challenges in the equities market, the fixed income market is poised to offer opportunities for investors seeking alternative avenues for returns. The delicate balance between supply and demand, coupled with strategic investor behavior, will continue to shape Rwanda's market landscape in the coming weeks.