Investing on the Rwanda Stock Exchange
What each party does, what you need to open an account, what a trade costs and what the tax authority withholds. General information, no personalised advice.
Who does what
Four parties are involved, and none of them is interchangeable.
- The Capital Market Authority (CMA) regulates the market and issues licences.
- The Rwanda Stock Exchange (RSE) runs listing and trading.
- The central depository (CSD) holds securities in electronic form, in your name.
- Licensed brokers are the only parties allowed to execute an order on the RSE.
Opening a securities account (CSD)
A CSD account is the prerequisite for any trade. It is opened through a licensed broker, never directly.
- An identity document: national ID for residents, passport for diaspora investors.
- A colour passport photo.
- A Rwandan bank account, where dividends and coupons will be paid.
- The broker processes the file and confirms the account opening with the CSD.
Buying equities
Ten companies are listed on the RSE: five Rwandan and five cross-listed from other East African markets.
- The minimum board lot is 100 shares, and quantities trade in multiples of 100.
- The RSE commission is 1.71% of the amount, on both the buy and the sell side.
- A market order executes at the available price, a limit order only at your price or better.
- Liquidity is thin on several lines: an order can sit unexecuted for several sessions.
Buying bonds
The Rwandan bond market is dominated by government securities, with a handful of corporate issues.
- The National Bank of Rwanda issues a bond every month, over terms of 3 to 20 years.
- Standard minimum of 100,000 RWF on government securities, in multiples of 100,000.
- Standard minimum of 1,000,000 RWF on corporate bonds.
- Coupons are paid every six months, the principal is repaid at maturity.
- Selling before maturity goes through the RSE secondary market, at a 0.049% commission.
Fees and tax
Two deductions to keep apart: the market commission, paid on every trade, and withholding tax, taken from income.
- RSE commission of 1.71% on equities, on both buy and sell.
- 5% withholding tax on dividends and coupons for residents and EAC investors.
- 15% withholding tax for investors outside the EAC.
- Diaspora investors also need to account for the tax rules of their country of residence.
Key figures
- Minimum lot, equities
- 100 shares
- Market commission, equities
- 1.71%
- Market commission, bonds
- 0.049%
- Minimum, government bonds
- 100,000 RWF
- Minimum, corporate bonds
- 1,000,000 RWF
- Withholding tax, residents and EAC
- 5%
- Withholding tax, outside the EAC
- 15%
RSE rule, quantities in multiples of 100
On both the buy and the sell side
On the RSE secondary market
Standard minimum, outside any waiver
Standard minimum, outside any waiver
On dividends and coupons
On dividends and coupons
Glossary
- CMA
- Capital Market Authority, the regulator of Rwanda's capital market.
- RSE
- Rwanda Stock Exchange, where equities and bonds are listed and traded.
- CSD
- Central depository: it keeps the electronic register of securities held.
- Licensed broker
- An intermediary licensed by the CMA, the only party allowed to execute orders.
- Board lot
- The minimum tradable quantity, set at 100 shares on the RSE.
- Coupon
- Periodic interest paid to the holder of a bond.
- Yield
- Annual income relative to the amount invested, as a percentage.
- Maturity
- The date on which a bond's principal is repaid.
- Withholding tax
- Tax deducted from dividends and coupons before payment.
General information about how the Rwandan market works. This guide is not investment advice and does not commit the CMA, the RSE or any broker. Investing carries a risk of capital loss.