Bralirwa IPO gains momentum - By New Times on 06/12/2010

By Berna Namata

As the deadline for buying shares in the country’s first Initial Public Offer (IPO) by Bralirwa draws close, local investors are increasingly showing interest, industry experts say.

This follows the official launch of the sale of government’s 25 percent stake in the brewery on November 23 to the public.

“We have a lot of people coming and being curious about the IPO; in the banks a lot of people are coming and picking the forms and wanting to open up share accounts,” Andrew Otengo Owiny, the Executive Director of MBEA Brokerage Services, told Business Times yesterday.

Owiny, who also doubles as the lead transaction advisor of the IPO, observed that following the nationwide sensitization campaigns, the IPO is steadily generating a lot of interest among the general public.

“Given that it is the first time it is happening; I have a good feeling about this curiosity because if you do not have the curiosity then you can not translate it into actual purchases,” he said.

With the December 17 deadline for buying shares approaching, Owiny said his team would intensify efforts to attract potential investors.

“The effort in these two last weeks (of the offer) is going to be translation (into purchases),”

While the deadline for buying shares still stands, Owiny said possibilities of extending the deadline will be determined by demand.

“The extension of the deadline would be purely to allow more Rwandans to participate should we see that there is an appetite but we do not take the decision now; we take that decision closer to the end….; if the response is overwhelming then we can have a compelling case. ” he said.

However, according Lawson Naibo, the Chief Operations Officer (COO) of Bank of Kigali, one of the commercial banks offering loans to buy shares, the response from the market has been relatively slow.

“Lets admit that it did not really start on 23rd; it started last week because the various documentations, the forms, the prospectus were not available until Monday ( last week); given that it was the first week , I believe that it will pick up,”Naibo said on Saturday.

The COO also said the bank has so far received loan application forms approximately worth half a billion francs.

“We believe that the awareness campaign should have been done abit better; we are still finding people getting surprised that there is an IPO going on.”
Naibo said the bank is sending SMS alerts to its customers reminding them about the deadline of the offer.

Each of the 128, 570,00 ordinary shares of the IPO offer costs Rwf 136. The minimum per application form which costs Rwf13, 600 is 100 shares.

The government plans to raise Rwf17.5 billion from the IPO, whose shares have been offered at 20 percent discount from the actual valuation to encourage investor participation and activate the secondary market.



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