10 March 2016

Rwanda: Crystal Telecom to Disburse Over Rwf2.2 Billion in Dividends

Are you a shareholder at Crystal Telecom? If yes, the firm is disbursing Rwf2,215,454,024 in dividends in coming days.

Shareholders will receive a dividend payment of Rwf8.2 per share in coming days following a decision by the firm's board.

The total proposed dividend disbursement is Rwf2,215,454,024, which represents a dividend of Rwf8.2 per share of 270,177,320 shares issued during last year's Initial Public Offering.

According to a letter from the firm addressed to the chief executive officer of Rwanda Stock Exchange, the dividend will be paid out following approval by the shareholders annual general meeting to be held soon.

Crystal Telecom last year sold 270.71 million shares, which is 20 per cent of leading telecom, MTN Rwanda.

The firm's initial public offering was oversubscribed by 123 per cent receiving over 2300 applications from Rwanda, the East African region and beyond.

The IPO was at Rwf105 with the minimum share application at 1,000 shares.

The shares debuted at the Rwanda Stock Exchange (RSE) at Rwf145 in July last year.

This is the second dividend in a period of less than a year since the IPO in May and June last year.

The company paid a first special dividend per share of Rwf3.75 in October last year.

According to analysts from CDH Capital, a local Broker and Finance House, by paying total dividend of Rwf11.95 for 2015, the company shows its promise to its shareholders by above normal return on investment.

Noordally Shehzad, the chief executive officer of CDH Capital, said payment is likely to drive up interest in the shares locally, regionally and internationally.

"With a dividend yield of about 12.57 per cent - based on the current market price of Rwf95 per share - this is more than any other locally listed companies can provide so far. This performance is among the best if a regional comparison is made," Shehzad said.

Share price expected to go up

Given the company's good performance, brokers expect the price of the shares to go up as local, regional and international investors increasingly express interest.

"We have already seen many positive reactions from the market. Our order book has started to increase with this news," Shehzad added.

"While we need to be prudent not to fuel and create any price hike, in our opinion, based on the dividend yield of 12.57 per cent, there are good reasons to be optimistic and to believe that CTL will head north," Shehzad said.

Commenting on the development, Robert Mathu, the chief executive of Capital Markets Authority, told The New Times that the disbursement was a 'good return'.

He said the move to regularly pay out dividend by the holding company was a good sign to investors.

The firm's dividend policy, experts say, could be geared at boosting confidence in the stock which had lost value in previous months after debuting at Rwf 145 per share.

Currently, Crystal Telecom shares are priced at Rwf99 per share, according to information posted on CMA web site.


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