Abstract

The study, titled Stock Market Listing and Company Performance in Rwanda aimed to explore
the connection between a company's stock market listing and its performance. Examined
within were firms listed in the Rwanda Stock Exchange, specifically Bralirwa, KCB, and BK.
Utilizing a quantitative research design, the study relied solely on secondary data, primarily
the financial statements of the three companies that operated in Rwanda between 2008 and
2015. The scope included BK, Bralirwa, and KCB. Data gathered from 2010 to 2012 was
structured in tables, with financial ratios computed and subsequent analysis conducted
using SPSS to ascertain the relationship between stock listing and financial performance. The
results demonstrated a positive yet statistically insignificant relationship between stock
listing and the financial performance of the listed firms. Notably, the correlation between
financial leverage and financial performance lacked statistical significance (R = 0.303, P >
0.01) and showed a negative correlation with market ratio (0.582, P > 0.01).
Recommendations included a call for improved liquidity management, especially in working
capital for firms like BK, to address the impact on liquidity levels while maintaining financial
stability. Stakeholders were encouraged to recognize the linkage between stock listing and
financial performance and adopt suitable measures to assess and analyze the financial status
of companies. Moreover, the study revealed that companies in Rwanda tend to rely more on
short-term debt than long-term debt, potentially due to the underdeveloped bonds market in
the country. Liquidity ratios exhibited a negative relationship with financial leverage,
indicating that highly profitable and well-performing companies in Rwanda tend to have less
debt and rely more on internal financing sources, aligning with the pecking order theory.
Furthermore, the study emphasized considering the market value of capital structure in
evaluating stock listing, given its stronger connection to financial performance compared to
the book value.
Keywords: Stock Market, Listing, Performance of Companies, Rwanda Stock Exchange,
Liquidity.