NSX results slow on back of crisis

THE Namibian Stock Exchange’s (NSX) results have taken a knock since the start of the financial crisis last year. In its annual report for 2008, the company states that revenue dropped from N$6,2 million in 2007 to N$5,27 million this year. Operating income has almost halved, from N$4 million to about N$2,3 now.

This leaves its surplus for the year at N$4,1 million, down from N$5,3 million a year ago.The global credit crisis has eroded a lot of the gains made on the NSX since 2003, the company’s annual report states. From 259 points in 2003, the index rose to a peak of 1034 in October 2007, only to fall back to 479 in March this year. This came on the back of carnage on the Johannesburg Stock Exchange (JSE), where many companies on the NSX are primarily listed. The local index of only Namibian firms by contrast has remained firm, increasing from 52 to 160 points over the same period, a gain of 208 per cent. And even at the height of the crisis in 2008, the local index recorded a steady 18,7 per cent rise while the overall index plummeted over 40 per cent. The two biggest culprits in the NSX’s overall fall were Anglo American and Old Mutual, who due to their trading volumes have a massive impact on the performance of the NSX. In Chairman Peter Koep’s annual report, he says the company is currently looking at the exchange’s problem of over-reliance especially on Anglo American’s share performance. The total value of trades on the NSX in 2008 dropped by 16 per cent to N$9,1 million, from over N$10 million last year.Koep says this came even though the volume of trades increased by 20 per cent, suggesting that plummeting share prices due to the crisis affected the NSX negatively. On the back of these weaker numbers, the NSX ‘experienced a reduction in the number of listings’. One major listing that has been postponed indefinitely is that of service group Bidvest, while the report says dual listings have also decreased, ‘especially in the exploration mining sector’. But the news is not all bad, as Koep also says in his report that in terms of volume traded, January 2009 was ‘the best January in the history of the NSX’.To improve its performance the NSX is looking to diversify its offerings by for example listing new bonds on the exchange.Also, the NSX wants to encourage state-owned enterprises to list on the stock exchange.