Nam bonds keeps raining billions

Namibia made a significant N$2.7 billion by end of last year from its bonds which are trading on the international market as compared to N$2.23 billion in the preceding year, the Bank of Namibia latest annual report shows.
According to the BoN, the turnover ratio of government bonds during 2012 increased to 29.5% from a rate of 27.4 % recorded in 2011.
Namibia opted to raise money from the international stock markets since last year, in a bid to close down a growing budget deficit opened two years ago.
At that point the country went on an overdrive to create unemployment through creating public works in agriculture, tourism and infrastructure development.
The BoN annual report also show that Namibia’s ten year Eurobond issued in 2011, traded exceptionally well during 2012.
“The yields on the Namibian sovereign bond traded lower, tightening from 5.571% at the end of 2011 to 3.8% at the end of December 2012,” BoN noted.
BoN also states that nominal outstanding government bonds  increased on year to year basis from N$8,15 billion to N$ 9.24 billion at the end of December 2012.
Government bonds are trading with different codes on the domestic market ranging from GC14 to GC30.
“Amongst all 8 government running (GC14,  GC 15, GC17, GC18, GC 21, GC 21, GC27 and GC30), the GC 14 was the most traded bond whilst the GC 15 was the least traded with a total amount to N$66. 9million,” BoN notes.
Although the BoN argues that there have been consistent investment growth outside the country, the same cannot be said for the Namibian Stock Exchange which shows a mixed performance of Government’s local bonds.
“The local bonds show a marginal improvement from N$14,1 billion by end January to N$14, 2 billion towards the end of March.” NSX report states.
GC 24 is the most performing bond throughout those three months constantly raising at N$ 2,07 billion, followed by   GC 15 with N$ 1, 6 billion and GC 14 at N$ 1, 5 billion. GC 30 showed a slight increase from N$ 2.95 million by 28 March from N$ 2.8 million by end of January as shown in NSX report.
On the other hand, the State Owned Enterprises which include Road Fund Administration, Telecom Namibia and Nampower which also float their bonds at NSX, have remained constant raising over N$1, 4 billion since last year.
Nampower 2020 is still leading the trade with N$5 million.  
The Road Fund Administration (RFA) 16 is constant, trading at over N$ 3, 3 million whilst Nampower (NMP19) is at N$ 2,5 million.
The commercial banks (Bank Windhoek, FNB, Nedbank, Standard Bank) had on their side raised a total amount of N$1, 23 billion by 28 March from N$ 1,13 billion in February, which was a slight decrease from N$ 1,22 billion in January.  March saw the addition of a bank Windhoek bond ‘BWRL17.
However, BoN states that in regards to the yield spread, the Namibian bonds and equivalent South African bonds widened during 2012 when compared to 2011, as South Africans bond yields fell by higher margins.
“It was more pronounced during the second and fourth quarter while mild narrowing was observed in the third quarter.
The spreads on shorter terms bonds increased with similar magnitude throughout the year.
In this regard, the GC 14 and GC 15 recorded an average spread of 99 and 77 basis points, above the R206 and R157 correspondingly.” BoN’s report states.
Meanwhile, the yield spread expanded rather significantly in the medium  long term bonds during 2012.
The yields on the GC 17, GC 18 and GC21 averaged 108,116 1nd 113 basis points above the RSA benchmarks, the R203, R204 and R208 respectively.
BoN latest report notes that the widening of the spread could be ascribed to the fact that the Namibian market is not as liquid as the South African market.