NSX Increases Value Up to N$1.6 Trillion in ‘Illiquid Market’

At the end of 2014 the total market capitalization of the Namibia Stock Exchange stood at N$1.680 trillion or US$145 billion, reconfirming the local bourse’s position as the second largest exchange by market capitalization in Africa, after the Johannesburg Stock Exchange.

According to the NSX 2014 annual report, the local index increased by 17.3 percent in 2014 on turnover of N$294 million after a 21.3 percent increase in 2013. This impressive increase was achieved in what the chairman of the NSX, David Nuyoma, described as an “illiquid market”. In comparison, the NSX overall index increased by 10.2 percent against the JSE all share index which increased by 7.2 percent.

“The enhancement of the governance landscape has positively positioned Namibia on the African investment scene and resulted in the deepening of the Namibian capital market as it opens our market to a larger international investing pool. Many more steps are required to truly open our markets, not least of which are the formalization of our bond market and setting up a Central Securities Depository (CSD) for the trading in electronic scrip,” said Nuyoma in his chairman’s report.

Nuyoma said the NSX intends implementing both the bond market and the CSD during 2015. He noted that deepening the markets with these projects will hopefully open the shareholder base of Namibian companies to enter the market through listing on the NSX.

“As in most African markets, ours is plagued by small size and illiquidity and can … change by having more choice and depth. However, the exchange cannot force anyone to list their companies and if they perceive uncertainty in the regulatory space, listing is a difficult step to take,” said Nuyoma.

The NSX chairman further noted that it is of utmost importance to have clear guidelines on any requirements for Namibianisation, black economic empowerment and localization.

Nuyoma emphasized that he NSX can play a meaningful role in these areas if the rules of the game are clear and consistent.

“The NSX has maintained world class regulation of listed companies and shall continue to do so as dilution of these requirements may lead to lower levels of investment due to institutional investors not being allowed to participate in the market,” noted Nuyoma.

Source : New Era