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Locals miss out billion dollar local bourse

Mon, 19 October 2015 21:22
by Charmaine Ngatjiheue
News Flash

The Namibian Stock Exchange (NSX) Chief Executive Officer, Tiaan Bazuin has thrown his weight behind locally owned companies listing on the equities market which is one of the of the richest bourses in Africa in terms of market capitalisation.

NSX market capitalisation is hovering above the N$27b mark and the local bourse remains one of the lucrative money spinners in the country. Other very competitive and rather robust stock counters include the Johannesburg Stock Exchange and the Kenyan Stock Exchange.

Ironically Namibia while rated high on capital stand very few locally owned companies have seized the opportunity to list of the local equities counter. Even some companies that have local players but emanating from a South African umbilical cord are still to list on the local stock market.

Bazuin said the local bourse is sorting out modalities to lure the local players on the local counters market. “We would like places like Old Mutual and Sanlam, these are international or South African owned but I would like to see their Namibian companies listed in Namibia. We would like to see more Namibian companies listed,” Bazuin said.

He added that the local bourse would like to see MTC list on the stock exchange, so Namibians can share in the profit of the companies they support, saying the company that wants to list does not have to be a billion dollar company, “as we can see in companies like the Namibia Asset Management which is one of the smaller owned Namibian companies that have listed and done well and we would love to see many of those list,” he said.

Bazuin revealed that the reason why many smaller privately owned companies do not want to list is because they do not want to open their books and or show their financial records, while others wrongly believe that best practices in governance are just a burden and don’t add value, hence they choose not to list on the Namibian Stock Exchange (NSX).

He added that one of the NSX’s strategies is through engaging with the markets as well as the sponsors to encourage more Namibians to list on the stock exchange, saying they are really trying to get them to list thus they also deal with government to aid them.

He went on to say that this is the reason why we have the Namibian Financial Sector Strategy (NFSS) to help deal with this as we want more Namibian assets on the exchange, however we cannot force locally owned companies to list.

“The current uncertainty on the Black Economic Empowerment (BEE) front and what will be contained in The New Equitable Economic Empowerment Framework (NEEEF) also deters listing as companies fear listing now will not add points and any future BEE points system.

The NSX believes once NEEEF requirements are clear we can play an active role in creating a platform to find broad based Namibian/BEE shareholding in line with any requirements set by government .We have however not seen the requirements yet,” Bazuin said.

Figures at hand shows that the local bourse has also attracted interest from the State Owned Enterprises and private companies who have floated bonds estimated to be worth over N$33b.

Although the NSX in the past used to list both local and international companies, there has been mounting queries whether the billion dollar stock market industry has a way of involving locals in its dealings.

According to the latest monthly report, the local bourse now has N$27.8 million market capitalisation by total shares in issue with most of the transactions being done by either the companies on the bourse or institutions. Meanwhile, the total Market capitalisation by free float stood at N$8.6 million at present.

Although the market in Namibia is thought of as liquid, it reaches close to 100 000 deals within a month, most of the trading is done between institutions with very little or no participation by individuals.

It is a necessity that more Namibian companies need to come to the market and expand their shareholding base if the liquidity problem is to be addressed.