Role of Information Asymmetry on Performance of Companies’ listings at Rwanda Stock Exchange

Abstract

The study assessed the role of information asymmetry and regulatory requirements on performance the Rwanda Stock Exchange (RSE) listed firms. It adopted a descriptive, quantitative research approach. The target population for the study was 100 respondents from different categories of the selected companies of capital market exchange in Kigali City. Probability sampling technique was used to collect data, done by means of a structured questionnaire and interview. The Statistical Product and Service Solutions (SPSS) program version 23.0 was used to analyze the results. The results showed that the socio-demographic were dominated by females; age ranged from 40-50 years old, the married people and the education level were Bachelor’s degree studies. The findings revealed that 41% of respondents were strongly agreed with information availability being a factor of companies listing at RSE. Other characteristics of companies listing regarding information asymmetry at RSE agreed by respondents including the availability of communication platform (68%), Companies being informed (37%), Companies are being told about ASM (47%), the advantages of listing are being explained (53%), information is accessible through the public media (63%), and free information is available via the vending business (32 percent). The study found that adjusted R-square was 0.676, an indication that there was variation of 67.6% on the information asymmetry at 95% confidence interval and model was significant since the p-value was less than 0.05without the interaction term, F (4, 99) 22.055, <.0018. The significance value was less than 0.05 an indication that the model was statistically significant. Therefore, RSE should motivate listed companies to use financial management information needs to be accompanied by strong commitment, sufficient manpower and financial resources, widespread internal support, and an agenda for effective investment.