The Initial Public Offer (IPO) issued by Crystal Telecom has left a vacuum at the Rwanda Stock Exchange as subscribers rush to buy into MTN-Rwanda’s shares.
Crystal Telecom (CLT), one of Cristal Ventures LTD’s portfolios, is selling its 20% stake in MTN Rwanda, part of MTN Group.
Due to it’s profitability, “It is receiving a lot of subscribers,” Celestin Rwabukumbu, CEO of Rwanda Stock Exchange Market told KT Press. He added that this scenario has left the other products on the stock exchange business paralysed.
A recently issued government treasury bond, has not yet received buyers on the secondary market, despite being discounted by 99.574.
The 10-year bond, worth Rwf10 billion ($14.5 million), which was issued a week ago, and oversubscribed by 228.19% on the primary market, is now stagnant on the secondary market due to the focus on CTL IPO.
“There was no single transaction made on the secondary market for the Treasury bond,” Rwabukumba told KT Press on Wednesday morning.
Jack Kayonga, CEO of Crystal Ventures Limited said, “MTN-Rwanda is a money-making business.” He told journalists during the launch of the telecom’s IPO, “The Company wants to give an equal opportunity for everyone”.
Dunga Katongole, a banker told KT Press after buying shares in the telecom’s IPO, that he was motivated by the value of MTN Group’s share, which is valued at almost Rwf1.6 million, yet the MTN-Rwanda shares are being sold at Rwf105 only. “We expect the same growth from these shares as well,” he said.
For Rwabukumba, “Many people are rushing to buy the telecom’s shares mainly because of its brand name. They expect huge returns on investment.”
Meanwhile, CLT has gone overboard and even used shrewed approaches to push the subscription.
Foot soldiers have been deployed on the streets with fliers and billboards advertising the IPO.
The company has also hired agencies to send intruding and junk SMSs inviting subscribers to buy shares.
The $40 million IPO, is set to close this Friday (June 5,) and becomes the 3rd local company to register on the Rwanda Stock Exchange after Bank of Kigali and Bralirwa.