More Namibian companies encouraged to list on NSX

Government Investment Pension Fund (GIPF) chief executive Martin Inkumbi says the fund would like to see more local companies on the Namibian Stock Exchange (NSX).

“One would like to see the listed market growing, especially with Namibian owned companies,” Inkumbi says.

He says the fund currently retains 45% of its assets in the local economy.

“As per the regulations by the Namibia Financial Institutions Supervisory Authority, the fund is required to retain 45% of its assets in the local economy and they can invest up to 55% outside,” Inkumbi says.

According to Inkumbi, in Namibia the fund is primarily investing in listed assets on the NSX.

Speaking on the declining membership, Inkumbi says there has been a decline of 1 000 members.

“The cause is that there is no expansion in the public sector due to economic slowdown. We have seen a stance from the government where it has not been aggressive in growing the public sector,” he says.

Inkumbi says the benefits being paid out by the fund are more than what is calculated, as the funds are maturing.

“As the fund is growing, you tend to see more of its members going into retirement, while new employees are not growing at a higher rate,” says Inkumbi, adding that the difference is normally covered by the returns the fund makes on investments.

Currently GIPF holds over N$160 billion in assets.

However, investment analyst Arney Tjaronda says the NSX’s listing requirements can be perceived as onerous by some businesses.

“While crucial for market transparency and investor protection, these requirements can be resource-intensive for smaller companies, potentially discouraging them from pursuing an NSX listing,” he says.

Tjaronda says Namibia’s financing ecosystem is immature and may not be fully equipped to support all types of businesses seeking to list.

“Limited access to pre-IPO funding or venture capital can hinder some companies from meeting the NSX’s listing requirements. This creates a bottleneck for the development of a vibrant stock exchange like ours,” he says.

Tjaronda says many business owners are hesitant to relinquish some ownership and control by listing on the stock exchange.
“The concept of diluting ownership through public offerings can be unappealing, especially for entrepreneurs who have built their businesses from the ground up,” he says.

Additionally, there are concerns that listing will not result in the desired level of fundraising

“Limited liquidity in the Namibian capital market could lead to lower valuations than expected, further discouraging potential listings,” says Tjaronda, adding that some businesses may prefer to remain private and operate with a more flexible ownership structure.

“Addressing these factors through potential reforms to listing requirements, fostering a more robust financing ecosystem and educating businesses on the benefits of public markets could encourage a more active NSX and contribute to Namibia’s economic growth,” he says.