The Uganda, Kenya and Rwanda bourses have failed to attract new initial public offerings in the past nine months, exposing the markets to liquidity problems.

The Rwanda Stock Exchange (RSE) has three IPOs in the pipeline, but so far none of them has secured the regulator’s approval.

“In East African Community stockmarkets, it is only Tanzania that has had an IPO,” said Davis Gathaara, managing director of Baraka Capital, a brokerage firm based in Kigali.

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RSE, the smallest stockmarket in East Africa, has been hit hardest due to the few products it offers. Statistics show that the market value decelerated by 19.5 per cent, from $41.9 million in the first six months of 2015 to $33.6 million from January to June 15th this year.

The RSE All Share Index had dropped by 5.69 points by mid-2016.

“Foreign investor-driven markets like ours are facing the same bearish trends we have seen worldwide and in the region. The low liquidity was expected, as big bargain hunters are lacking on some good counters like Bank of Kigali,” said Mr Gathaara.

In April, the Rwanda government announced plans to sell its 19.8 per cent stake in I&M Bank Rwanda to the public as part of its plan to expand the capital markets.

Analysts say the lengthy procurement process to get firms to help in the listing has delayed the new IPO.

The listing of Kigali Bus Services (KBS), a city transport company seeking to raise equity for fleet expansion, has also been delayed.

CDH Capital Ltd, a stockbrokerage firm that has been preparing KBS for listing since 2014, has failed to secure the regulator’s approval.

According to analysts, the failure will affect the Chicago-based legal advisory services provider Baker & McKenzie’s projections that there are 15 IPOs worth $1.5 billion in the pipeline.

Industry players said CDH Capital was forced to return the professional fees that KBS had advanced them.

No complaint

Asked about the standoff between KBS and CDH capital, CMA executive director Robert Mathu said, “I am not aware of it as I have not received any formal complaint from the two parties.”

The bourse has three locally listed equities. The share prices of Bralirwa and Crystal Telecom have dropped in value as retail investors flee the market.

While the cross-listed stocks on RSE — KCB, Nation Media Group and Equity Bank — are strong in Kenya, their counters in Rwanda have not been active.

The RSE is still suffering a spillover effect from last year as a result of depressed global markets and a slowdown of the Chinese economy.

Analysts say markets are projected to remain slow in the second half of this year, worsened by Brexit.

“I expect the market to remain depressed because of uncertainty,” said Mr Gathaara.