The Rwanda stock market has shown resilience in the face of the Covid-19 pandemic and remained stable, even performing better in some indices compared to the same time last year.
The market has doubled in traded volumes in the first three months of 2020, compared with the same period last year.
Between January 3 and March 18, it has garnered Rwf8.646 billion ($9 million) in volumes, compared with Rwf4.031 billion ($4.2 million) in volumes traded between January 3 and March 29, 2019, according to data from Rwanda Securities Exchange.
After the region announced the first Covid-19 in Kenya the Nairobi Securities Exchange tanked by Ksh120 billion ($1.2 billion) in total market capitalisation, with major stocks like Safaricom and KCB Bank declining by 5.4 per cent and 7 per cent respectively, there was nothing drastic in the Rwandan market.
“Surprisingly nothing unusual has happened in the market yet, on Monday we had more volumes, on Tuesday even more, the share prices are normal, people in our market do not speculate much, it’s the nature of Rwandans.”
“The cross listed companies haven’t traded much, the market has been dominated by the big four, Bralirwa, BK, Crystal Telecom and I&M, and also the fixed incomes, our all indexes have gone up by 15 per cent” said Celestin Rwabukumba, the chief executive of RSE.
The Rwanda share index is down 1.5 per cent, while the market capitalisation is up 10 per cent. Mr Rwabukumba said the banking sector is well capitalised.
“The services, MICE and tourism in general will be affected, if the situation goes on like this for six months there will be a problem.”
This week the National Bank of Rwanda (BNR) announced that it has set aside a Rwf50 billion ($50 million) external lending facility for commercial banks to borrow from, as lenders brace themselves to deal with the market shocks caused by the Covid-19 pandemic.
Banks with liquidity challenges will be able to borrow at the central bank rate, with the tenure extended from overnight to 3.6 and 12 months, available for the next six months.
Among other interventions, the regulator announced easy loan repayment plans to borrowers.
Cash flow challenges
A statement by the central bank says; “Banks will be exceptionally allowed to restructure outstanding loans of borrowers facing cash flow challenges arising from the Covid-19 pandemic.”
Maurice Toroitich, the chief executive of BPR Atlas Mara said; “Individual businesses that become stressed due to direct and indirect effects of Covid-19 and unable to repay loans can now approach their banks for loan restructures.”
“All businesses are currently affected because of low trading volumes, but most affected are hospitality, tourism related businesses and those businesses that depend on these,” he said.
BNR also reviewed the existing treasury bonds rediscounting window, where for the next six months it has offered to buy back bonds at the prevailing market rate.
So far, Rwanda has reported 17 Covid-19 cases in the country.