Results availed by the Namibia Stock Exchange (NSX) show that Namibia has recorded an All Share Index change of -0.12, trading at a value of over N$10 billion, for the term ending 31 August 2016.
Namibia having a smaller number of investors trading on the NSX listed companies on Namibia’s stock market, received positive market gains while most African countries recorded losses during the past seven months of the year due to a decline in stock prices.
However, economic analysts, speaking to The Villager, said that the positive market gains are due to a disadvantage that Namibia has in terms of the fact that the Namibian market is predominantly demand driven.
Analyst from the Namibian Equity Brokers (NEB), Madelein Smith, said that the gain in the stock markets can also be due to a number of factors, whereof the regulatory environment is one.
“Namibia’s market is predominantly demand driven, which means there are more buyers than sellers and due to the demand, the prices are pushed upwards. The fact that there are limited good quality assets listed and the low interest rate environment, investors are forced to look for alternative investments, bearing a slightly higher risk, to enhance their returns and income,” Smith said.
Meanwhile, international media reported that investors on the Nigerian Stock Exchange were hard-hit with the all share index plunging by 38.1% as of August 31, 2016. Other notable equities market trading in red as of August 31, 2016 include the Malawi Stock Exchange down by 22.8%, Ghana Stock Exchange down by 13% while the Nairobi Stock Exchange is down by 6.4%.
The Zimbabwe Stock Exchange (ZSE) which trades in US$ was also among the unfortunate, down 13.6%. Since the beginning of the year trading on the ZSE has been subdued due to a myriad factors including delayed approvals for foreign investors to repatriate their earnings and initial investments.
“There are several factors that will determine the movement or direction of stock markets. However, one of the main factors that will determine price movement, if we assume that there are no external shocks to valuations, that is, unexpected interest rate increases, adverse macro-economic events, a financial crisis, is the profitability of the companies and quality of earnings making up the index,” Brian van Rensburg, Director at PSG Wealth Management told The Villager.
Some of the companies listed on the NSX recorded good yields, with Bidvest Namibia recording an actual dividend yield of 3.78%, while Oryx Properties are yielding at 7.73%. Santam 3.73, Vukile 8.46% and Trusco Group Holdings at 2.30%.
“The Namibian companies listed on the NSX has continued to deliver solid results with strong growth in earnings, balance sheets and dividends. This has ensured support for the share prices through continued demand from local and international investors for Namibian companies,” Van Rensburg said.
Meanwhile the overall Market Capitalisation of companies listed on the NSX stood at N$1,607,204 million, while only about N$31,944 million was local. The overall Free Float Market Capitalisation was N$1,144,004 million while N$10,636 million was from local. The NSX overall index was down from 987.24 points in May losing 0.73% on a total return basis in June compared to a 3.58% m/m decrease in May.
Meanwhile, about N$17 billion exchanged hands on the Namibian Stock Exchange (NSX) in 2015, with dual-listed companies dominating trading at the local equities’ market. Showing an N$9.1 billion improvement, compared to the N$8 billion worth of shares traded in the 2014 financial year. The NSX is one of the largest bourses in Africa in terms of total market capitalisation, which is now hovering above the N$1.3 trillion mark. In 2013, the value traded was N$5.5 billion, and kept a steady increase since that year.