Rwanda govt in plan to boost secondary market deals

The government has gone back to the drawing board to map out strategies of boosting bond trading on the secondary market.

It has also announced plans to operationalise a unity trust scheme, which could boost bond trading on Rwanda Securities Exchange (RSE) before the end of the year.

Under the unit trust scheme, individual investors pool money for investing in stocks, shares and money market instrument.

Analysts are optimistic the new development will stimulate secondary market bond trading on the RSE.

“We are in the final stages of setting up a unity trust,” said Eric Rwigamba, director, financial sector development at the Ministry of Finance and Economic Planning.

“The company to run the trust has been formed but we are only waiting for the Cabinet to name the managers and its board of directors,” said Mr Rwigamba.

The aantage of the scheme, says Celestine Rwabukumba, chief executive officer of RSE, it is run by professional fund managers on behalf of the unit holders under collective investment scheme.

“This saves them time to run around daily to manage the business. Furthermore, some of them have capacity to run the investments,” Mr Rwabukumba added.

The operation of the unity trust scheme is part of the major plan by the government to grow the financial services sector and stimulate economic growth.

Economic performance in fiscal year 201314 was affected by the delayed impact of the suspension of aid by some donors and delays in approval of disbursements by others.

The economy slowed 4.6 per cent growth compared with the projected growth of 6.6 per cent.

In addition, there are also plans to operationalise asset managers in the economy, which would stimulate the bond market further, said Robert Mathu, executive director of Capital Markets Authority.

“There are many bids but no offers,” said a stockbroker.

On Tuesday last week, a market report signed by Mr Rwabukumba, confirmed the low business, three months after the Treasury bond was issued.

READ: Rwanda govt should issue bonds to create a steady supply

SOURCE: The East African