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Other Articles from The Villager

Missed opportunities on the stock market

Mon, 25 January 2016 04:09
by Villager Editorial
Editorial

There are revelations that last year alone, about N$17 billion exchanged hands at the Namibian Stock Exchange (NSX) through share trades.

This is a phenomenal figure, and also shows the competitiveness of the local bourse at a time when the economy is expected to grow by anything between 3.5% and 4.3%.

That growth is way above many other economies in sub-Saharan Africa. Zooming into the figure itself shows that there is a lot of activity, and the stock market indeed is a big contributor to the economy and can actually be a place where many Namibians can emancipate themselves financially.

Unfortunately, there are not so many ordinary Namibians vested with the possible gains associated with stock market trading, nor is there a deeper understanding on how Namibians from across the divide can accrue benefits from opportunities presented at the equities’ market.

While trading at the counters market itself is rather technical and not easy to understand, we certainly have no one but ourselves to blame for not seeing the opportunities presented by the stock market, 26 years after independence.

Ideally, most people would opt for other forms of investing their hardearned money because of the risks associated with the stock market. Buying stock at the stock market can be a typical gamble as there is no guarantee that the chosen counter will perform well or bad, as this purely depends on economic performance and also external forces affecting the counter.

However, the risks related to stock market trading do not outweigh the gains associated with taking such a risk, as many have become millionaires by simply buying stocks at the equities’ market.

In the past, the NSX once talked about a need to sensitise Namibians about the benefits of trading at the stock market and ideally, this also included making sure that most Namibians understood how the local bourse worked.

Numbers alone also show that the NSX is one of the largest on the African continent in terms of market capitalisation, and fares very well compared to other bourses on the continent.

One believes that if all those who have something to do with the stock market take some time to sensitise the Namibian market about the operations of the local bourse, not only will it improve the share trades, but also make some of the Namibians better financially.

Although it takes a certain amount of money in one’s pocket to be able to buy stocks, the stock market certainly presents one of the few opportunities to lift Namibians from abject poverty.

It is also ironic that recent statistics show that only 10% of the population controls the means of production, leaving the rest of the 90% to eke out a miserable living.

This makes Namibia one of the countries with the most unequal distributions of wealth. Partly, this skewed economic distribution is because such opportunities for emancipation, including the stock markets, are not being utilised fully.

It is actually a fact that the 10% who are in the affluent bracket and enjoy successes are economically emancipated Namibians who certainly understand how stock markets work, hence they take advantage of them.

On the other hand, the ones who are marginalised do not understand the stock markets and other potential opportunities, hence they miss out. One way or the other, someone somewhere has to open this stock market to Namibians, and have it benefit all. TM