The Rwanda Securities Exchange (RSE) will close 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 ($1.25) and Rwf239 ($ 35 cents) respectively, year on year from US Cents 26 and US Cents 5 respectively.

The Tanzania share index (TSI) almost doubled, jumping 95 per cent to 2,839.680 last week from 1,455.52 in January, compared with a 14.5 per cent rise over a similar period last year. In 2012, the TSI grew from 1137.67 to 1302.62. The All Shares Index (DSEI) for the same market jumped 23 per cent over the same period from 1491.56 to 1835.050.

READ: Dar domestic market cap doubles as Nairobi edges towards $23bn

At the Nairobi Securities Exchange, the 20-share index has gained 18.89 per cent since January, while the bourse’s all-share index rose 41.18 per cent in the period. Based on its all-share index, the bourse was in October rated third best in Africa, after Malawi and Ghana.

Analysts say the region’s bourses benefited from falling inflation rates which freed consumer spending, while the relative pick up of the global economy as well as the quantitative easing in the US market also revived international capital flows.

READ: Share prices in regional bourses rise on foreign investor interest

“We are seeing improved economic conditions in Uganda, which is lifting the stock market. The year is going to be a good one for stock markets across the region too,” said Arthur Esiko, a research analyst at African Alliance Uganda.

“Foreign investors have returned to the market and are actively investing in equities,” he said.

Political stability in the region after Kenya’s General Election in March, alongside falling inflation rates, has boosted investor confidence with more local and foreign investments in equities.

Kenya’s overall inflation rate fell to 7.36 per cent in November 2013, down from 7.76 per cent in October, mainly due to high food supply and stable oil prices. Rwanda’s consumer price index (CPI) slowed to 4.58 per cent year on year in November down from the 5.10 per cent recorded in October, according to Rwanda National Institute of Statistics.

Tanzania’s year-on-year inflation rate fell to 6.2 per cent in November from 6.3 per cent a month earlier, the National Bureau of Statistics (NBS) said, while Rwanda’s inflation declined to 4.6 per cent in November from 5.1 per cent in October. Tanzania’s inflation rate for November dropped slightly to 6.2 per cent from 6.3 per cent in October.

“This will attract more foreign investments in 2014, a key driver to the growth of the bourses,” said John Kamunya, a senior consultant at Emexea Consulting Limited.

Even then the last few weeks have not been robust as investors take the traditional Christmas break. In the week ending December 15, the NSE 20 share index was down 1.27 per cent week on week to 4,913.55 while the NASI Index declined by 2.03 per cent to close at 133.92.

Turnover was down 24.59 per cent to Ksh2,414.93 million ($28 million). Rwanda Stock Exchange ALSI and RSI remained unchanged during the same period to close at 138.92 and 235.55 respectively.

The USE ALSI lost 3.54 per cent week on week to close at 1,519.94. USE LSI lost 9.12 per cent to close at 239.52. DSE TSI gained 0.01 per cent week on week to close at 2,844.86 while the DSEI closed the week down one per cent at 1,844.66.

Britam is among the best performing counters year on year with its shares trading at Ksh14.55 (US cents 16) last week, a 158.93 per cent jump.

The company in the third quarter of 2013 expressed its intention to acquire 99 per cent of Real Insurance to expand its insurance business. The insurer also acquired a 25 per cent stake in Acorn Properties to energise its presence in the real estate market.

ALSO READ: Foreign investor demand pushes Britam shares to new high

Analysts said acquisition plans by many companies had attracted more investors, pushing the prices up in 2013. Centum, which expressed interest in acquiring 73 per cent shareholding in Genesis Asset Management and taking over the land-rich company, Rea Vipingo, saw its share price jump 170 per cent compared with last year.