Shares of Rwanda’s largest lender by assets, Bank of Kigali (BK) Group Plc, started trading on the Nairobi Securities Exchange (NSE) on Friday.

It becomes the second company to cross-list on the Nairobi bourse after Uganda’s Umeme in December 2012.

The BK Group’s shares, whose primary listing is Rwanda Stock Exchange, started trading at a reserve price of Ksh30 ($0.30).

The highest bid price for the BK Group shares by 11.30am was Ksh32 per unit ($0.31), a trader said.

The listing followed a recent successful rights issue at the ratio of three shares for every one held, a cash call that raised Ksh7 billion ($70 million).

Growth strategy

The bulk of fresh cash will go into supporting Bank of Kigali’s growth strategy, which is heavy on penetrating the largely untapped retail banking segment.

“BK Group was raising capital to meet its gross needs and requirements, and we took this opportunity to cross-list on the Nairobi Securities Exchange because we wanted not only to offer more liquidity to our existing shareholders, but also exposure to the Rwandan market for potential new shareholders and we have managed to do that with this transaction," chief executive Diane Karusisi said.

“We want to deploy this capital very quickly and efficiently in the Rwandan market and we are committed to deliver the expected results to our investors.”

The company said last Friday that existing shareholders exercised 103.58 million rights out of the 222.2 million units available offered, with the balance of 118.64 million untaken rights — known as rump shares — sold mainly to qualified institutional investors (QII).

Some 146.15 million shares have been allocated on the Rwanda Stock Exchange (RSE) with the balance of 76.07 million going to the Nairobi bourse.

'Landmark' investment

Head of investment banking in Africa at Renaissance Capital David Dalhuisen termed the cross-listing as a “landmark”, giving investors on the Nairobi bourse to share in returns from Rwanda’s banking industry.

“This transaction is particularly exciting as it is the first time that an East African company has combined a cross-listing with a capital raise, showing the potential and advantages of tapping a new market for that purpose,” Mr Dalhuisen said.

Bank of Kigali Group Plc is the holding company of Rwanda’s largest commercial lender Bank of Kigali Plc, BK Insurance, stock brokerage BK Capital and technology services business BK TecHouse.

Bank of Kigali Group's largest shareholders are the Government of Rwanda (29.5 per cent), Rwanda Social Security Board (25.1 per cent) and international institutional investors (14 per cent).

“It was very natural that Nairobi will be our first market for international listing. The liquidity at the Nairobi exchange is very impressive (and) the custodial services here satisfy the investors who want that comfort,” BK Group chair March Holtzman said.

“We have been so warmly received by the authorities and the Nairobi Securities Exchange. Today is real a very significant step in terms of regional economic integration.”