How to invest on the Rwanda Stock Exchange – Financial Markets (Senior 6 Entrepreneurship) | Ganzaa

Financial Markets

Lessons

Senior 6 · Entrepreneurship

Financial Markets

4 lessons

Lesson 4 of 4

How to invest on the Rwanda Stock Exchange

35 min

Uwase places her first order

Uwase has decided to put part of her Frw 600,000 into shares (lesson 1). She cannot walk into the exchange and buy them herself: on the RSE, every trade goes through a licensed stockbroker, and every share she owns will be recorded in her name at the Central Securities Depository. This lesson follows the path from deciding to invest to receiving a dividend, and shows how to count the real cost and return.

Definition

Stockbroker: a firm licensed by CMA to buy and sell securities on the exchange for clients, in return for a commission. CSD account: an investor's account at the Central Securities Depository, in which the securities they own are recorded electronically.

Example: CMA's list of licensees (2026) includes securities brokers such as African Alliance Rwanda Securities, BARAKA Capital, CDH Capital Rwanda, FAIDA Securities Rwanda, MBEA Brokerage Services and MO Capital.

Definition

Market order: an instruction to buy or sell at the best price available now. Limit order: an instruction to buy at no more than, or sell at no less than, a stated price. Settlement: the exchange of money for securities after a trade; on the RSE it takes place two business days after the trade date (T+2). Contract note: the broker's statement of a completed trade, showing the price, quantity, commission and fees.

Definition

Initial public offer (IPO): a company's first sale of shares to the public, in the primary market, after approval by CMA. Prospectus: the document that describes the company, the offer and its risks. Oversubscription: applications for more securities than are offered, so each applicant receives fewer than requested.

The path of an investor

Set a goal and a budget. Invest only money you will not need for several years, after keeping an emergency fund.
Choose a broker from CMA's list of licensees, and compare their services and charges.
Open a CSD account through the broker, filling in the account-opening form with your identification and bank details.
Fund the account by transferring money to the broker.
Place an order: which security, buy or sell, how many, and a limit price. Because many RSE shares do not trade every day, a limit price protects you from paying far more than you planned.
The order is matched on the RSE's trading platform during the session, from 09:00 to 12:00 on business days (RSE, 2026).
Settlement follows at T+2: the shares move into your CSD account and the broker sends a contract note.
Hold and review. Dividends are paid to the shareholders on the register; follow the company's published results and decide calmly when to sell.

Worked example 1: the real cost and return of a trade

Uwase buys 1,000 MTN Rwanda shares at Frw 192, the closing price on 30 September 2026. Suppose the broker's commission and market fees total 1.5% of each trade's value (an illustrative rate: ask your broker for the real one). A year later she receives a gross dividend of Frw 10 a share (illustrative) and sells at Frw 215.

Cost: $1{,}000 \times 192 = 192{,}000$ ; fees $0.015 \times 192{,}000 = 2{,}880$ ; total Frw 194,880.

Sale: $1{,}000 \times 215 = 215{,}000$ ; fees $0.015 \times 215{,}000 = 3{,}225$ ; she receives Frw 211,775.

Dividend: $10,000$ less 5% withholding tax $= 9,500$ . The gain on a listed share is free of capital gains tax.

\text{return} = \frac{211{,}775 - 194{,}880 + 9{,}500}{194{,}880} \times 100\% = \frac{26{,}395}{194{,}880} \times 100\% \approx 13.5\%

Break-even price (no dividend): she must sell at a price $p$ with $0.985 \times 1{,}000p \ge 194{,}880$ , so $p \ge 197.85$ : about Frw 198, 3% above her buying price, just to cover the fees.

Worked example 2: an oversubscribed IPO

A company offers 100,000,000 new shares at Frw 100 each and receives applications for 125,000,000 shares. It allots shares in proportion to each application (one common method; the prospectus states the actual rule). Uwase applied and paid for 5,000 shares.

Allotment ratio: $\frac{100{,}000{,}000}{125{,}000{,}000} = 0.8$ , so she receives $0.8 \times 5{,}000 = 4{,}000$ shares, worth Frw 400,000.

Refund: she paid Frw 500,000, so Frw 100,000 is returned. The offer was 125% subscribed, like the Development Bank of Rwanda's sustainability-linked bond of 2026, which drew subscriptions of 126.2% (RSE, 2026).

Worked example 3: when is the trade settled?

Uwase's order is matched on Thursday 1 October 2026. Counting two business days: Friday 2 October is T+1, and Monday 5 October is T+2. The shares appear in her CSD account and her money is paid out on Monday 5 October.

Warning

Protect yourself. Deal only with brokers on CMA's list of licensees; never hand money to an unlicensed "agent" who promises fixed high returns on shares. Read the prospectus before applying for an IPO. Do not put all your savings in one company: spread them across shares, bonds and funds. If something goes wrong, CMA has a complaints procedure for investors.

Tip

Small amounts count. You do not need to be rich to start. Buying a little every month, through shares or units in a fund, builds the habit and smooths out the price you pay, because the same amount buys more shares when prices are low.

RwandaTV, "A beginner's guide to investing on the Rwanda Stock Exchange". Compare the steps described with the eight steps in the diagram above.

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Practice

Explain why an investor must use a licensed stockbroker to trade on the RSE.
Distinguish between a market order and a limit order, and say which is wiser for a share that trades rarely.
List, in order, the steps an investor follows from opening an account to receiving a dividend.
An investor buys 500 BK Group shares at Frw 671 and pays fees of 1.5%. Find the total cost. If she later sells at Frw 700, paying 1.5% again, find her net proceeds and her profit.
An IPO is 150% subscribed and shares are allotted in proportion to applications. An applicant asked for 2,000 shares. How many does she receive (whole shares only)?
A trade is matched on Friday. On which day does it settle, if there is no public holiday?
Evaluate the advice: "Put all your savings into the one listed company you know best."

Show answersHide answers

Only licensed brokers are members allowed to trade on the RSE's platform; this protects investors, because brokers are supervised by CMA and trades are recorded and settled through the CSD.
A market order trades at the best price available now; a limit order sets the highest buying (or lowest selling) price. A limit order is wiser for a rarely traded share, whose price can jump.
Set a goal and budget; choose a CMA-licensed broker; open a CSD account; fund the account; place an order; the order is matched on the RSE; settlement at T+2 with a contract note; hold and collect dividends.
Cost $500 \times 671 = 335{,}500$ , plus fees $5,032.50$ : total Frw 340,532.50. Sale $500 \times 700 = 350{,}000$ , less fees $5,250$ : Frw 344,750. Profit Frw 4,217.50, before any dividends.
Allotment ratio $\frac{100}{150}$ ; $2{,}000 \times \frac{100}{150} \approx 1{,}333.3$ , so 1,333 shares.
T+2 business days after Friday is Tuesday (Monday is T+1).
Knowing a company well is useful, but one company can fail or cut its dividend, and the investor would lose heavily; on a small market she might also struggle to sell. Spreading savings across several companies, bonds and a fund lowers risk without giving up much return, and keeping an emergency fund avoids forced sales. The advice is unwise.

1Uwase places her first order

2The path of an investor

Uwase places her first order

The path of an investor