Dual-listed NSX shares in ‘bloodbath’

IF the Namibian Stock Exchange (NSX) only traded in local shares it would be one of the few indices in the world that has shown any growth in the prevailing catastrophic economic environment.

The local index, which as the name suggests comprises only of Namibian-based companies, gained 19 per cent last year and is up by 1 per cent this year, according to Brian van Rensburg of Investment Holdings Namibia (IHN).
The local index has outperformed all other major indices since 2003, according to the IHN’s quarterly report.
‘This means that if you had invested in the local market, you would not have been that badly off,’ said van Rensburg.
NSX Chief Executive Officer John Mandy added that currently ‘local is lekker’ in terms of shares.
He attributes a large part of this success to the ruling that pension funds have to invest 35 per cent of their money in Namibian companies.
As there are only seven local companies traded on the exchange, this means local shares are always in short supply.
Mandy said this proves that sometimes ‘isolation works in your favour’.
Van Rensburg confirmed that IHN ‘constantly has demand for local shares’ and that people ‘buy them and they do not want to sell them’.
He says this also shows that local shares represent value.
Some of the biggest local gainers are FNB Namibia, which is up 25 per cent and Namibian Breweries which gained 26 per cent.
Meanwhile the dual-listed shares on the NSX have experienced a ‘bloodbath’ and are ‘are dragging our market down’ according to Mandy.
Most companies that are dual-listed on the NSX are primarily listed in South Africa while two – Old Mutual and Anglo-American – are primarily listed in London.
After an all-time high of 1027 on March 6 last year the overall index, which includes the dual-listed companies, hit a year low on November 20 at 489.
On the same day the Johannesburg Stock Exchange (JSE) reported its year low of 17814.
The financial crisis in America started developing around March and South African stocks were hit hard, with the JSE losing 26 per cent of its value so far.
The NSX rallied to 611 in January this year before falling to its lowest level yet at 404 on Monday this week.
This also comes on the back of new lows on the JSE.
Overall the index has lost 40 per cent of its value from last year according to IHN.
In terms of free float market cap, a measure of the total value of an index, the NSX fell from N$1,24 trillion on March 6 to N$490 billion on Monday according to Mandy.
Two of the companies hardest hit are Old Mutual and Anglo-American, whose size means they significantly influence the NSX’s performance.
Especially Anglo-American plays a big role, and the NSX has tended to closely follow the company’s share price.
According to Mandy, Anglo-American’s share price has dropped from N$556 to N$144, while Old Mutual’s has taken a nosedive from N$24 to N$4,75.
This translates to a loss of market value to the tune of N$545 billion for Anglo-American and N$75 billion for Old Mutual.
This means Old Mutual has slipped from being the second biggest company on the NSX to currently being worth less than Nedbank, a company in which it has a majority stake.