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Daily Nation : February 22nd 2014
30 | Business News SATURDAY NATION February 22, 2014 RETURNS | Yields will be determined by the market rate Rwanda woos Kenya investors in energy with Sh1.6bn bond The debt, meant to finance infrastructure projects is targeted at East African traders BY JOSHUA MASINDE @masindej firstname.lastname@example.org R wanda is tapping Kenya investors to fund development of roads and energy industries. Briefing Kenyan investors yesterday during the promotion of the Sh1.6 billion bond issue in Kenya, the National Bank of Rwanda governor John Rwangombwa (right) said his country plans to issue Treasury bonds three times a year to help raise the needed funds. “This is just the beginning and these quarterly issues will be targeting not only the East African market but international investors,” Mr Rwangombwa noted. In the local market, the country has only issued five Treasury bonds, which are very few compared to other larger economies in East Africa. Rwanda’s Capital Markets Authority executive director Robert Mathu attributes the few Treasury bonds that have been issued to the market to the relative newness of the country’s capital markets. “When you start a new market, it takes time to develop products. But, we are going to have a continuous programme going forward with the frequent issuance of Treasury bonds on a quarterly basis,” Mr Mathu said. A total of $18.3 million (about Sh1.6 billion) is to be raised through the bond, which has a three-year maturity period and the yield will be determined by the market. The bond is targeted to East African investors due to the small size of the issue by international standards. It will close on February 27 and list on the Rwanda Stock Exchange on March 7. The rate will be market de- termined with the preference given to the lowest bidder according to Mr Rwangombwa. Yields have in the past issues averaged between 8 per cent and 11 per cent. AT A GLANCE Rwanda’s debt instrument Target: Country hopes to raise Sh1.6bn Time: The bond has a threeyear maturity period and its yield will be determined by the market forces. Target: By virtue of its size compared to global standards, the bond issue is targeted to East African citizens. Road shows in US Treasury bonds issued be- tween 2008 and 2011 in the country amounted to Sh3.9 billion (Frw31 billion). In April 2013, Rwanda priced its debut Sh34.4 billion ($400 million) Eurobond at 6.875 per cent. The bond was marketed by way of road shows in the US, the UK, Kenya, Singapore, Germany and Hong Kong and was oversubscribed. Central Bank of Kenya governor Njuguna Ndung’u, said this is an important step for the securities markets in East Africa to harness funds in the region for investments in key projects. Jubilee, Citadel join hands to unveil cover for workers in informal sector BY NATION REPORTER Jubilee Insurance and Citadel have unveiled the first of their low income products, a week after they formed a partnership to insure most Kenyans in the informal business. The two underwriters have courted the matatu industry with Tumaini Ya Jamii (hope for the family), a life insurance cover. “It is very sad for any family to be woken up by fire outbreak and lose its hard-earned property in a split second,” said Jubilee’s chief executive Patrick Tumbo. The launch took place around Afya Centre, near Bus Station, Nairobi. In attendance were stakeholders in the county government, transport industry and the underwriting business. Tumaini ya Jamii targets Kenyans living in peri-urban areas. It covers family funeral expenses, permanent disability, domestic fire and material damage with a minimum entry age of three months to 70 years. ANN KAMONI | NATION Commissioner of insurance Sammy Makove (right) with Jubilee Insurance CEO Patrick Tumbo during the launch of Tumaini Ya Jamii, a cover product targeting average consumers. The premiums range be- tween Sh450 and Sh4,200 while compensations will be between Sh10,000 and Sh100,000. “Through Matatu Welfare Association members and affiliates will not only access cover and information but claims administration which is a key pillar in its success micromanaged by the partner,” noted Citadel’s boss Elvis Ackel. The insurers joined hands to address the plight of an aver- age consumer, especially slum dwellers who seek insurance but do not have the financial capability. Jubilee and Citadel have approached Umande Trust, a non-governmental organisation, Safaricom and Posta as distribution channels for the cover. The insured would use M- Pesa and post offices to pay premiums. Claims will be paid within 48 hours after submission, the firms said.
February 21st 2014
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