THE MOVE to venture into brokerage services by Bank of Kigali will increase competition at the Rwanda Stock Exchange (RSE) and boost the sector and the economy generally given the bank's portfolio, stock brokers have predicted.
The bank announced, yesterday, its subsidiary firm, BK Securities Limited, had been approved and licensed by the Capital Markets Authority (CMA) and the National Bank of Rwanda's Central Securities Depository department to start brokerage services at the stock market.
BK Securities will be offering brokerage services for all equities listed on the bourse, including Bank of Kigali shares. It joins eight other brokerage firms licensed to buy and sell shares on the RSE.
Shehzad Noordally, the Continental Discount House general manager, one of the stock brokers, said Bank of Kigali's big pool of clients would be able to easily access and pitch its brokerage services, adding that the development would boost his business.
"It will be easier for Bank of Kigali to convince a distant client. The capital market will grow and we will benefit from it as well as players," he said in an interview with The New Times yesterday.
Simon Kalenzi, the Dyer and Blair chief executive officer, said Bank of Kigali's move was good for the country's economy, "though it means the nine brokers will be competing for a few companies listed on the stock market."
"The competition is going to be stiffer," he said. "We will now start going out to reach businesses instead of just sitting and waiting for them to come to us."
Kalenzi hopes more firms would be listed on the bourse this year to widen the clientele base.
There are currently four equity listings on the Rwanda Stock Exchange. These are Kenya Commercial Bank, Nation Media Group, Brasseries et Limonaderies du Rwanda Bralirwa and the Bank of Kigali, as well as bonds issued by the Government and the Banque Commerciale du Rwanda.
The RSE was established in 2005 to handle stock market operations in the country. It is registered as a company limited by shares, with 60 per cent owned by brokers, 20 per cent by the Government and 20 per cent by other shareholders.