Bank of Kigali’s fresh capital call through a rights issue has attracted international institutional investors.

The new institutional investors bought the retail investors’ and Rwanda government’s quotas in the ramp-up offer of Rwanda’s most profitable bank.

The big appetite from the institutional investors pushed up the rights issue subscription rate by 107 per cent, which means Rwf4.2 billion ($4.7 million) has to refunded.

The value and number of shares bought, however, has not been made public.

But many retail investors did not find the Rwf270 ($0.3020) discounted price, which the rights issue share was priced, tractive enough, compared with Rwf280 ($0.32) it was trading at before the issue.

The Rwanda government, the second biggest shareholder in Bank of Kigali, with a 30 per cent stake also did not take up its rights, giving a chance to institutional investors seeking opportunities in emerging markets.

Stockbrokers say the minimum capital requirement of $250,000 (Rwf220.6 million) for the ramp-up offer was a good deal for deep-pocketed institutional investors.

According to the allocation report published by the bank, an additional 7.2 million shares were issued for the bank employees, which raked in Rwf1.9 billion ($2 million).

The total subscription performance was 107 per cent for the 103,587,100 new shares, which were applied for at Rwf270 ($0.302) per share.

“We are happy we raised the money we needed. This shows a vote of confidence in our business strategy despite emerging capital markets correcting themselves,” said Diane Karusisi, Bank of Kigali chief executive.

The bank went back to shareholders to seek fresh capital to boost its capacity to finance big card projects in a competitive banking environment.

The bank is to cross-list 76071182 new shares on the Nairobi Securities Exchange and 146,151,041 shares on Rwanda Stock Exchange. Markets analysts expect more buyers when the shares start trading on the NSE.

The cross-listing decision came at a time trading data showed the volume and value of share trade on the RSE dropped by 40 per cent while value plunged 31 per cent in the 10 months to October compared with same period in 2017.

Rwanda has four domestic listed companies — the other three being I&M Bank, Bralirwa and Crystal Telecom.

The combined value of the shares traded dipped to $11.6 million in the 10 months to October, from the $16.7 million traded in the same period last year.

“It’s not only the Bank of Kigali counter that has recorded low trade, but the entire equities market,” said Ms Karusisi, adding that investors are shifting their money into bonds to escape the equity markets uncertainty.

“As a result of low liquidity, the wealth of investors held in Rwandan stocks has been eroded, with those in Bank of Kigali taking the biggest hit on their earnings.

As the uncertainty on equities continues, stockbrokers said investors are shifting to the government bonds.

“Investor want predictability of earnings. When you go into the bond you know how much to earn,” said George Odhiambo managing director KCB Bank Rwanda.