IGIHE

Category: Business

  • Ethiopia, Rwanda discuss commodity exchange

    Igihe.com has learnt that the CEO of Ethiopia Commodity Exchange,Dr. Eleni Gabre-Madhin, is in Rwanda to discuss the possibility of adding some of Rwanda’s commodities into the commodity exchange.

    Gabre-Madhin says, “I am very excited to see the great progress made by Rwanda and to re-acquaint myself, though briefly, with the wonderful people I always remember”.

    She lived in Kigali for four years during her childhood and attended the Belgium School of Kigali (Ecole Belge de Kigali). This is her first trip back to Rwanda since she left in 1978.

    During her two-day trip, Gabre-Madhin accompanied by three colleagues will meet with Dr. Agnes Kalibata the Minister of Agriculture and Animal Resources and discuss the possibility of adding some of Rwanda’s commodities into the Commodity Exchange.

    The Ethiopia Commodity Exchange was established in 2008 and works to eliminate “food shortages and hunger in Ethiopia.”

    In December 2005, Ethiopian government established a Commodity Exchange aimed at transforming the country’s agriculture and bringing real progress toward the country’s poverty reduction and rural growth objectives.

    The exchange trades in six crops, including coffee, wheat, and maize, both on a physical trading floor in Addis Ababa and electronically.

  • BK-bank shares up for grabs

    By: Randa Rugangazi

    Yesterday, Bank of Kigali officially launched its initial public offering (IPO) of 300,304,000 shares at the price of RWF 125 per share. The bank is looking to raise RWF 37.5 billion from the IPO.

    Bank of Kigali (BK) first declared its intentions for an initial public offering (IPO) December of last year. The government and the bank were going to publicly offer a total of 45 percent of the bank’s shares.

    It was announced on 27 June that 300,304,000 shares would be up for grabs to the Rwandan public starting Thursday, 30 June.

    The IPO will then close on 29 July and BK bank will be listed on the Rwanda Stock Exchange on 29 August.

    During the IPO period, brokers will be taking orders from interested invested for shares.

    The shares will then be distributed out to all investors. Different types of investors have a quota of reserved shares.

    East African investors have access to 82,591,440 shares. Rwandan incorporated businesses have access to 45,045,600.

    The bank’s chief operating office, Lawson Naibo told Igihe.com, “The funds raised will grow the bank’s lending portfolio and expand projects around the country.”

    There is optimism for the bank’s shares to be oversubscribed by investors. This follows the successful Bralirwa IPO issued end of last year. Bralirwa’s stock price shot up by more than 50 percent.

    The stock’s strong performance was later supported by Bralirwa’s net income growing by 62.8 percent. Net income is the balance of business after the reduction of expense costs.

    A company listed on the stock exchange has to regularly release its annual earnings to the public.

    Another contributing factor to the high optimism is BK’s strong asset base forecast to grow at 35 percent within the next five years.

    This growth forecast is based on a solid business plan in which the bank plans to focus on loans to small and medium sized enterprises.

    According to the Ministry of Finance, privatization efforts will boost stock market activity with increased options for investors.

    The efforts will also support the country’s economic growth, attract investors, and increase national savings.

    “Instead of depending on the government, as a shareholder, for capital to finance upcoming projects”, explained Mr. Naibo.

    The Rwanda Stock Exchange provides the bank with access to a new financing platform.

  • Court to decide on fate of Rwandatel

    KIGALI; Nyarugenge commercial court is expected anytime from now to pronounce itself on the survival of embattled telecommunication firm Rwandatel Igihe.com has learnt.

    The court had earlier appointed an interim administrator of the company for 60days that have already expired.

    During the 2-month period, Richard Mugisha was mandated to investigate the company the evidence of which would be principal in the court decisions for declaring the company bankrupt or continue with its operations.

    Speaking to Igihe.com today Mugisha said that the period of 60 days were a fair period and he managed to finish the report on Rwandatel as requested by the Court, “It wasn’t so difficult for me to make the assessments and I think what I presented to the judges was fair enough,” he said.

    Mugisha admitted that the company is now waiting the feedback from the Judges and then see the way forward.

    Mugisha was appointed by the Commercial Court to take over specific roles and responsibilities that included the total management of all the company’s assets and accounts.

    The court also tasked him to supervise Rwandatel’s day-to-day business and oversee expenditures and payments of its debts, taking of loans and giving of the company’s assets as guarantees for loans on behalf of the company in the period.

    A rival telecommunication company MTN Rwanda as Rwandatel’s creditor is so suspicious since the interconnection fees of fixed lines is continuously increasing the debt and they are not sure whether the company will have capacity to pay back.

    “According to the report I presented yesterday to the Judges, Rwandatel owes MTN a whooping Rwf1,341,557,553 and we don’t know if the company is in the position to pay back,” Paul Mugemangango, the Senior Manager, Legal and Corporate Affairs MTN Rwanda told Igihe.com.

    The debt includes Rwf60M accumulated on fixed interconnection fees during the period of 60 days after the revocation of the company’s mobile license.

    According to sources who had access to the report given to the Commercial Court judges, Rwandatel accepts all the debt claimed by MTN.

    Other sources also say that the Chinese company; Huawei who supplied materials is demanding over US$40M and this company is suspicious of the Rwandtel’s ability to clear such a huge debt.

    Rwanda’s utilities regulatory agency withdrew Rwandatel’s GSM Mobile license in April this year and within weeks, the Office of the Registrar General had instituted insolvency proceedings against the company.

    The commercial court in Kigali then appointed an administrator who is a judge of the High commercial court to take charge of the company and advise the court whether the company was solvent or insolvent and should be liquidation.

    Following commencement of insolvency proceedings, Rwandatel had laid off 43.2% of its workforce as part of a company-wide restructuring process to lower its expenditure.

    Operating both GSM Mobile and Fixed licenses, Rwandatel had a total workforce of 317 employees. However, only 180 have been retained to run its remaining voice, internet and data services all of which run on the fixed network.

  • Mattress war threatens Rwandaform monopoly

    The effects of a liberalized market in Rwanda are beginning to manifest through the ongoing silent commercial war among mattress manufacturing companies in the country and those from East African member countries, Igihe.com has learnt.

    Rwandaform a former monopoly of mattress products in Rwanda has now embarked on a campaign aimed at eradicating poverty beddings in form of make shift grass cushions onto which most poor families retire.

    The company’s director Patrick Makuza says that the mattresses will be issued on credit to vulnerable groups.Makuza rather encourages those in need of mattresses to group themselves into cooperatives making it easier for them to access credit in banks. Those that purchase mattresses in bulk will receive a discount.

    “Currently we’re working on how to implement this program, but our main aim is to have all Rwandans sleeping on quality mattresses,” he remarks arguing that Rwandaform mattresses are not only durable but also ensure ones physical health.

    Makuza attacked those selling mattresses produced from neighbouring countries at very low prices compared to those of Rwandaform describing them as fake the very reason they are sold at extremely low prices.

    In the last few years mattresses from neighbouring countries especially Uganda and Tanzania have amplified competition in the Rwanda market through offering prices Rwandan clients consider affordable compared to Rwandaform mattress prices.

    However, Makuza claims, “the cheap mattresses are often substandard and that can lead to back pain when used. He adds that Rwandaform provides orthopaedic mattresses used by those suffering from back pain and can also be used by those who are not ill to help reduce fatigue”.

    Efforts to reach for comment from the Rwanda bureau of standards were unsuccessful, as most could not answer their phones.

  • Businesswomen train to access global market

    Lack of vital information about products and services on demand in the foreign markets,language barrier and high transportation costs continue to hinder efforts of Rwanda businesswomen from accessing the larger global market…

    coffee-picking.jpgRwandan women entrepreneurs through a specialized training program-Access Program, funded by the Canadian government are slated to enhance their access to a wider global market for their products and services.

    “This Access Program aims at supporting women businesses through facilitating trade and making them understand the constraints they are facing”, explains Sebastien Turrel chief commercial officer of centre du commerce international.

    “We are not supporting them financially but technically through knowledge training, market access , providing them online resources and online promotion”, Turrel explains.

    For the start, 60 women entrepreneurs have been selected by Rwanda Development Board and the private sector federation. The selected women already have established businesses including handcraft businesses, horticulture and textile and leather.

    The targeted women managers include those already exporting or with exporting potential and national trade organizations. The program is in line with ITCs mandate of supporting private sector development, strengthening capacities of women-owned businesses building a network of strong partners and accessing foreign markets among others.

    The program specifically aims at increasing the capacities of public and private partners in beneficiary countries, directly supporting women entrepreneurs to be export ready and accessing foreign markets with innovating products, contributing better revenues and improved services.

    Women at the training explained that challenges including language barrier and Lack of proper knowledge on what the market demands in terms of quantity, quality, and products continued to hinder their access to foreign markets.

    While voicing her concern, Ntibagwire Donatille, managing director of Floris, a company that specializes in the sale and exportation of fruits says “transportation of our products to overseas markets is expensive , that’s why the prices of our products are higher than those of some of our competitors such as in Uganda. The same product that is sold in Uganda could almost be one dollar cheaper than here she says”.

    Ntibagwire explains,“The current demand for our products is due to popularity of organic products in Europe but the situation could be much better”. She adds that the high transportation costs would be solved through increased government subsidies similarly done in other countries.

    She also points out that they need to be more aware of some the market demands and what they are asking for.

    This weeklong program drew experts from Cameroon, Senegal, Uganda and South Africa that will train Rwanda women entrepreneurs in components such as business counseling export training, trade information and access to foreign markets. A total of more than 800 women have been trained across Africa.

  • Rwanda honey wanted in Middle East,Europe

    By: Igihe.com Reporter

    Export opportunities await honey producers in Rwanda following the increasing demand of the country’s high quality honey on the international market.

    According to the Rwanda Bureau of Standards (RBS) Director General Dr. Mark Cyubahiro Bagabe, Rwanda honey is on high demand in big markets of the Middle East and Europe. “But the challenge is the low production volume”, he notes with concern.

    In response to increasing export, quality Dr. Bagabe reveals that, “RBS has adopted a multiple-pronged approach aimed at ensuring compliance of Rwandan honey with international Standards”.

    The Bureau has since offered training to local honey producers on the aspects of producing quality honey targeting the whole value chain. Currently RBS has certified five honey-processing companies and some are already exporting their products.

    Dr. Bagabe advises farmers to opt for high volume beehives that would increase quantity of honey produced. During harvesting, farmers are advised to avoid using smoke (smoke contains a chemical dioxin) feared to be a cancer agent(carcinogenic).

    Florida Uwamariya the Accounts administrator of Rwanda beekeeping services center has told Igihe.com, “Our sector has registered remarkable growth. Beekeepers are enjoying the fruits of their work and the sales volume has been ever increasing.”

    Uwamariya notes that honey quality improved after farmers received training in methods of safe extraction, post harvest honey management and packaging. “We are looking at how we can maintain hygiene and quality honey processing and setting up scale processing equipment to upgrade the quality standards and produce”, she said.

    The International demand for Rwanda honey is largely credited for its naturalness much of which comes from the country’s endowed forest and eco system. Uwamariya says that the demand for Rwanda honey is expected to boost incomes of women that are mainly involved in the honey sector.

  • Rwandans to gain from buying shares on stock market

    Introduced just less than five years ago, the Rwanda stock exchange market has excited many following the successful acquisition and profiting from Bralirwa shares. Bank of Kigali has revealed plans to issue an Initial Public Offering soon of which Rwandans are upbeat about…

    Robert Mathu, executive director of Capital Market Authority (CMA) has called upon Rwandans; especially the youth to embrace a savings culture most importantly through the acquisition of shares on the Rwanda Stock Exchange (RSE).

    A stock exchange is a marketplace for securities in the form of company shares and government bonds where the general public can acquire shares of a company at a specific fee per share. The shares fluctuate in value depending on the performance of the company.

    Recently Bralirwa, a brewery and soft drink company, sold its shares to the public for the first time; the new shareholders have seen their shares gain value by 62%. This has since encouraged the buying of shares on the stock exchange.

    The stock exchange market in Rwanda started in January 2008, preceded by Capital Markets Advisory Council (CMAC) setup in 2007 as a transitional body responsible for establishing a capital market in Rwanda and writing up regulations.

    CMAC has transformed into the current Capital Market Authority (CMA) a regulatory body of the Rwanda Stock Exchange (RSE).

    During its establishment, CMAC faced a challenge of finding Rwandan companies ready to sell shares on the new stock exchange. The government took the initiative to sell government bonds and set stage for private companies.

    Government bonds are a type of security issued by government, which pays back the money paid for the bond with interest after a certain period of time.

    While waiting for Rwandan companies to issue shares, CMAC ventured abroad. KCB and NMG, companies listed on the Nairobi Stock Exchange, were invited to sell their stock on the newly formed RSE. A company selling its stocks outside its original stock market is usually referred to as cross listing.

    Another major challenge was attracting foreign investors to invest in the RSE. The RSE started during the beginning of the global economic downturn, and foreign investors were cash-tight. Due to its underdevelopment, the RSE didn’t experience much repercussion from the global financial crisis.

    Mathu explains, “CMA is now working on implementing the legal framework and improving on investor protection.” A stock exchange just like any other marketplace needs regulation especially in protection of investors, who are essentially the buyers of securities.

    Mathu also stresses the need for transparency if the RSE is to mature into an efficient capital market. Transparency is especially needed in everyday transactions, transparency during transactions guarantees that sellers and buyers are given fair deals. Investors will be confident of the stock exchange if they see that it is fair and efficient.

    “We intend to introduce an electronic system within the next year. Such a system would improve on speed, transparency and efficiency.” Mathu said, explaining CMA’s future plans.

    The CMA in collaboration with stock brokers have embarked on an initiative aimed at educating the public about the stock exchange. Brokers act as middlemen between buyers and sellers on the stock exchange. As the RSE is still in its infancy, the Rwandan public needs to be educated on benefits accruing from investing on the stock exchange.

    “We have had to invest more time by meeting people on the streets explaining to them the benefits of capital market investments”, explained Shehzad Noordally, general manager of CDH Capital-Rwanda. CDH is a broker firm operating on the RSE.

    Bank of Kigali (BK) has revealed it will issue an Initial Public Offering (IPO) -financial jargon for selling new shares. The bank’s IPO may be another opportunity for Rwandans to make money on the stock exchange.

    BK’s IPO has caught attention of the people. There seems to be confidence for a successful IPO; much like that of Bralirwa, as was pointed out by Shehzad Noordally, “Many people made money from the Bralirwa IPO and have spoken to their friends. People will be happy to invest in the BK IPO.”

    Bank of Kigali hopes to use money from the IPO for small lending to customers, expanding more branches and electronic banking. The bank’s chief operating officer, Lawson Naibo, points out that the stock exchange is the best source for the bank to raise the funds for its projects.

    The stock exchange gives Rwandan businesses a new medium of acquiring cash for investment. The money invested on the stock exchange provides long term capital necessary for continual economic growth. The stock exchange is going to be crucial to maintain Rwanda’s economic growth.

    Increasing investment in the stock exchange by Rwandans will also boost Rwanda’s average income. Stockholders can earn an income through dividends paid out by companies.

    Rwanda has joined fellow EAC countries Kenya, Uganda and Tanzania in having a capital market. All regional stock exchanges have been around longer and are more active than the RSE-the Nairobi Stock Exchange being the most developed.

    The government’s privatisation scheme might see more companies issue shares on the RSE. The Bralirwa and upcoming BK IPO were triggered by the government selling off the shares it controlled in these companies.

    In the near future, the government might sell off more shares in other companies that will give Rwandans more investment options on the RSE. More IPOs may lead to more investment as Rwandans see the profits to be made on the stock exchange.

    Robert Mathu wants Rwandans to know that they can make money while helping build the economy through stock market investment.

  • RSE market highlights as at 23 June

    Today the RSE recorded one transaction of 1,000 BRALIRWA shares traded at Rwf 220; the closing price for the last 5 trading days and the total turnover for the day was Rwf 220,000.

    BRALIRWA had the first Annual General Meeting (AGM) after going public last Tuesday, June 21st, 2011 and the company’s books were also closed on the same day. Dividends will be paid on July 21st, 2011.

    At the close of business, there were outstanding offers of 21,900 BRALIRWA shares at Rwf 220 and 2,100 KCB shares at
    Rwf 180 and no bids.

    KCB and NMG counters did not record any transaction today and their share prices remained unchanged from yesterday’s closing prices of Rwf 175 and Rwf 1200 respectively.

  • Ex. German President to invest in Rwanda

    The former German president Prof.Horst Köhler recently announced his intentions to invest in Rwanda inspired by the country’s sustainable development.

    “I have particularly chosen to invest in Rwanda because of the country’s sustainable development compared to other countries in the region,” Kohler noted while emphasizing that the proper investment atmosphere seen in Rwanda has motivated him and mobilised other German investors to consider investing in Rwanda.

    Köhler also met with President Paul Kagame at village urigwiro.

    According to Foreign Affairs Minister, Louise Mushikiwabo , the former German leader wants to contribute to the development in the region where Rwanda is located, “Kohler wants to know much about the ongoing regional integration and devise appropriate ways of partnering with the region’s investors”.

    Köhler of the Christian Democratic Union in German was first elected in May 2004 and was re-elected five years later in May 2009. He also led the International Monetary Fund (IMF).

    During his east African tour Köhler also a distinguished economist held high level round table discussion held to address East African Community (EAC) integration, under the theme “Ambition for and reality of the EAC in globalized world.

    Köhler said, “the EA Monetary Union will never happen in 2012 or anytime soon and the process should never be rushed,” he said, adding that if the project is to be executed carefully and practically, then the EAMU should happen in ten-years or so from now, that is if the European Union experience is anything to go by”.

    “We started negotiations in 1991 and the European Monetary Union only got established in 1999 and the single currency coins began rolling out in 2001, which means it was a decade-long process,” said the former German President.

  • RSE market highlights as of 21 June

    Today, the RSE did not record any transaction as brokers were bidding and offering at different prices. BRALIRWA shares closed the day at Rwf 220; unchanged from yesterday’s closing price.

    Yesterday, the total turnover was Rwf 2,524,000 not Rwf 2,820,000 as reported from 11,200 BRALIRWA shares traded in 3 transactions at Rwf 230 and Rwf 220. BRALIRWA shares are trading ex-dividend since Monday 13th June, 2011.

    The KCB and NMG counters did not record any transaction today and their share prices remained unchanged from yesterday’s closing prices of Rwf 175 and Rwf 1200 respectively.

    At the end of formal business hours, there was an outstanding bid of 10,000 BRALIRWA shares at Rwf 215 each and outstanding offers of 6,400 BRALIRWA shares and 1,900 BRALIRWA shares at Rwf 230 and Rwf 220 respectively. There
    was also an outstanding offer of 2,100 KCB shares at Rwf 180 each.