Rwanda Stock Exchange closer to automated trading

Friday March 7 2014

By KABONA ESIARA Rwanda Today 

Plans to automate trading on the local bourse are gaining ground with the new trading system expected to be launched in the coming weeks.

Rwanda Today has learnt that talks that could see Rwanda Stock Exchange (RSE) use the East African Commodity Exchange (EAX) IT platform and infrastructure for its electronic transactions are at an advanced stage.

The deal, if successfully concluded, will encourage foreign companies to list shares in Rwanda, opening up opportunities for local equities investors to buy into foreign firms.

John Rwangombwa, the governor of the National Bank of Rwanda told Rwanda Today that though electronic trading had been delayed due to the heavy financial outlay required, RSE and EAX are now in advanced stages of sharing the NASDAQ system.

“We have been working on our side as a central bank to link the central securities depository. In the course of this year —in three or four months — automatic trading will be up and running,” Mr Rwangombwa said.

Currently, the EAX is using NASDAQ to facilitate trading on commodities. Data from EAX shows that 50,000 metric tonnes of maize, beans, coffee, pyrethrum and tea have been traded.

EAX communications manager Carol Rugege confirmed the partnership negotiations saying the NASDAQ has been customised to facilitate RSE trading but hastened to add that it is only the commercial aspect holding back the conclusion of the deal.

While trade volumes on the RSE have been steadily increasing, its current manual trading platform makes it uncompetitive in particular among offshore investors.

Despite the glitches, RSE closed the year as the best performing bourse in East Africa, capping what has been a rewarding year for investors across the region.

The RSE all-share index rose by over 130 per cent from 100 basis points at the start of the year to close at 234 basis points, driven by a strong price rally from Bralirwa and Bank of Kigali which rose to Rwf845 and Rwf239 respectively, year on year from US Cents 26 and US Cents 5 respectively.