Monday, 3 September 2012

Rwanda | RSE: The Week That Was

This week the Rwanda Stock Exchange market experienced mixed fortunes, having days of robust activity and sky-rocketing share prices, and others of less activity. However, overall the RSE went down in traded volumes and turnover compared to last week’s trading session.
The total turnover for this week stood at Rwf 224, 549,000 from 171,900 Bank of Kigali shares and 542,700 BRALIRWA shares traded in 37 deals compared to last week’s trading session which recorded a turnover of Rwf 1, 134, 357,800 from 8, 679,800 BK shares and 16,100 BRALIRWAshares traded in 30 deals.
This represents a near ten-fold decrease in total turnover, thus rendering the verdict this week as negative.
The major factor that influences stock prices is, as in all economics, supply and demand. Neutral observation of the RSE trends not only over this week but also weeks before that will show that at any given time there are typically more bids – at lower prices than the standard share price – than there are offers at reasonable prices. This causes a stand-off of sorts, resulting in a situation where there is little to no activity as both camps stick to their guns.
However, since the RSE has mainly two key players, thus forcing both buyers and sellers to reach a compromise and this limits the damage and holds the stock prices at a more or less consistent price range.
Next week however could prove to be different as the favorable first quarter earnings posted by both BK and BRALIRWA could boost share prices and set off a flurry of deals at the RSE.


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