The outflow of funds from emerging markets following last year’s slump in commodity prices has not impacted Rwanda much, according to Celestin Rwabukumba of the Rwanda Stock Exchange.
“Last year there were issues to do with commodities across the globe with Sub-Saharan Africa being affected in a big way that caused some exit of investments, but Rwanda was not affected much compared to other regional economies,” Rwabukumba told CNBC Africa.
Rwanda is not a commodity driven economy as it relies heavily on the service sector. The economy, however, saw some shocks due to spill-over effects.
The East African economy saw a 5.69 per cent decline on its bourse over the past year.
According to some statistics, Rwanda’s market capitalisation fell by about 87 billion Rwandan Francs ($111bn) with most dominant units losing over a quarter of their share price in the past year.
“Our share indices have gone down, it is a spill-over from last year, with issues to do with [the] slump in commodity price[s] and as a result prices have not recovered much,” said Rwabukumba.
While other economies saw an exodus of international investors, Rwandan investors had demonstrated some resilience.
.”[Even though there has been some spill-over effects], companies operating within the country have grown and made profits as fundamentals are still solid. The underlying is not being affected that much,” said Rwabukumba
“As long as fundamentals are in place investors should be patient,” he added.
Rwabukumba said of the few investors who have been exiting the economy, most were mainly in the retail space.
“Retail investors do not look at the fundamentals so they easily get worried,” he said.
“People who move markets are institutional investors and they have not been exiting the economy. Those who leave are those… expecting to get rich quickly,” he said.