NSX remains uncharted territory for Namibians

THE average Namibian does not know enough about the Namibian Stock Exchange (NSX) to use it as an investment tool. In an interview with The Namibian, NSX General Manager John Mandy said direct trading by ordinary people remained limited 15 years after Independence.

He vehemently denied, though, that trading on the stock exchange was the exclusive domain of the elite. Mandy ascribed the lack of public participation to a lack of knowledge about the stock exchange.He said, however, that it was not the role of the institution to educate the public on the role and value of stock markets.For now, institutional investors and a few private individuals dominate transactions on the NSX.A quick survey on the streets of Windhoek showed that most people believe the NSX was “for big companies” and had nothing to do with ordinary people The same sentiment seems to exist in a number of southern African countries.The notable exception is Zimbabwe, where ordinary people are taking a leading role on the Harare-based Zimbabwe Stock Exchange (ZSE) The issue was discussed at a meeting of SADC stock exchanges on May 26.The forum expressed concern about the fact that ordinary people were poorly informed about the role and value of capital markets.Economic analysts say the NSX, which has N$2,4 billion worth of shares in issue, could be boosted significantly by direct public participation.In Namibia and across the world, stock exchanges play a vital role in creating wealth and stimulating economic growth and development.Companies and institutions seeking to raise capital list on the stock market and offer shares to the public.Members of the public in turn buy shares and invest in the companies.According to Mandy, the ordinary working person is participating on the NSX indirectly, because most people are members of pension funds snapping up investments on the stock exchange.The NSX manager added that a lack of disposable income was another factor why people didn’t invest in the capital market.”It is unfortunate that the battle remains a domain of the strong ones.It is much easier to manage bigger funds than smaller ones,” said Mandy.The NSX chief said it was critical that information and education campaigns be intensified to encourage the public to invest and take part in the NSX.More aggressive strategies, he said, were needed to grow the local market.Mandy said it would be wise for Government to reduce corporate tax and encourage private companies to list on the NSX.Privatisation of State-owned entities was another strategy that could steer growth of the local bourse, he said.Mandy ascribed the lack of public participation to a lack of knowledge about the stock exchange.He said, however, that it was not the role of the institution to educate the public on the role and value of stock markets.For now, institutional investors and a few private individuals dominate transactions on the NSX.A quick survey on the streets of Windhoek showed that most people believe the NSX was “for big companies” and had nothing to do with ordinary people The same sentiment seems to exist in a number of southern African countries.The notable exception is Zimbabwe, where ordinary people are taking a leading role on the Harare-based Zimbabwe Stock Exchange (ZSE) The issue was discussed at a meeting of SADC stock exchanges on May 26.The forum expressed concern about the fact that ordinary people were poorly informed about the role and value of capital markets.Economic analysts say the NSX, which has N$2,4 billion worth of shares in issue, could be boosted significantly by direct public participation.In Namibia and across the world, stock exchanges play a vital role in creating wealth and stimulating economic growth and development.Companies and institutions seeking to raise capital list on the stock market and offer shares to the public.Members of the public in turn buy shares and invest in the companies.According to Mandy, the ordinary working person is participating on the NSX indirectly, because most people are members of pension funds snapping up investments on the stock exchange.The NSX manager added that a lack of disposable income was another factor why people didn’t invest in the capital market.”It is unfortunate that the battle remains a domain of the strong ones.It is much easier to manage bigger funds than smaller ones,” said Mandy.The NSX chief said it was critical that information and education campaigns be intensified to encourage the public to invest and take part in the NSX.More aggressive strategies, he said, were needed to grow the local market.Mandy said it would be wise for Government to reduce corporate tax and encourage private companies to list on the NSX.Privatisation of State-owned entities was another strategy that could steer growth of the local bourse, he said.