TRADING ACTIVITY
Total trading in terms of overall value traded decreased by 19% with N$ 2.5 billion traded in the calendar year 2000 and N$2.03 billion traded in 2001. A decline in volumes traded of approximately 35 % was also evident during 2001. Trading for the local index, i.e. Namibian companies primary listed on the NSX or deriving the majority of their income from Namibian source, dropped by 58% from N$149,1 million to N$62,3 million.
Partly due to the relatively low equity prices, trading in NSX listed bonds increased by 219%.
INDEX PERFORMANCE
The Overall Index opened on 292 points and gradually increased to 332 (14% up) just before 11 September whereafter it fell to a low of 267 from which it gradually picked up to end on 392 (a 34% return for the year). Companies which produced the best returns over the year were De Beers (delisted on 30 May 2001), Oceana Group, Anglo-American and Barloworld producing 75%, 47%, 42% and 40% respectively. The delisting of De Beers sparked some concern in the market because of the relatively high weighting (35.5 % of the total market capitalisation) that the company had on the Index. However, the listing of Anglo-American Plc abated these fears.
The Local Index did not produce a positive return in 2001 dropping from 92 at the beginning of the year to 59 by December 31. Offshore diamond company Namco mainly contributed to this decline when its share price fell from N$13.70 to N$1.39 during 2001. This price decrease resulted in the Local Index dropping by 27 points. However price decreases in most local companies further aggravated the gradual decline of the total Local Index with the exception of First National Bank of Namibia (FNB), Nictus, Namibian Sea Products and CIC Holdings which increased in share prices. FNB Namibia and Nictus posted increases of 50% and 25% respectively for the year. In a single month (April), FNB Namibia posted a share price increase of 17% when it rose from its opening of N$2.96 to N$3.45 at month end.
The movement in share prices of some individual companies should be seen against the sharp fall of the N$ against the U$ towards the end of the calendar year. Rand hedge stocks such as Anglo-American Plc increased in price from N$155.20 to N$184.00 during the final trading days of the year (01 December to 31 December 2001). In contrast, the share prices of many stocks in the financial sector came under pressure due to expected increases in the interest rates as a result of the fear of higher inflation rates driven by the exchange rates. Expected interest rate increases also manifested themselves in the prices of long term bonds, which dropped in price towards the end of the year.
OTHER DEVELOPMENTS
LISTINGS
The NSX has successfully listed its first corporate bond, namely the Standard Bank Namibia 12% coupon rate bond payable semi-annually from 19 November 2001 to 20 November 2006 and thereafter at the Step-up Coupon Rate if the bond is not called on terms as outlined in the Placing Document. The maturity date is on 20 November 2011; callable from 20 November 2006 on terms outlined in the Placing Document.
A further three new companies in the financial, mining and retail sectors were listed, namely New Africa Capital Ltd., Anglo-American Plc and JD Group Ltd. Anglo-American was the biggest listing in the history of the NSX adding a market capitalisation of N$189.9 billion at listing.
During 2001, the new NSX listing requirements were introduced. The implementation of the revised requirements was necessitated by extensive changes to the JSE listing requirements and by the NSX's desire to move towards international best practices. The new Listings Requirements also introduced enhanced principles for Corporate Governance to be reported on by all listed companies. The NSX presented a workshop for the listed companies to introduce and explain the enhanced principles.
SETTLEMENT SYSTEM
A new settlement system was introduced. This system enables the electronic settlement of dual listed securities traded on the NSX. Settlement is contractual, rolling T+5 and delivery versus payment based on adherence to the global standards. This settlement system provides a more cost effective, secure, transparent and convenient settlement environment for settling transactions.
FUTURE DEVELOPMENTS
The JSE Securities Exchange South Africa (JSE) and the London Stock Exchange (LSE) have recently announced that the JSE intends to acquire the LSE's new trading and information dissemination system. Due to the direct links between the NSX and the JSE, the NSX intends to adopt the same trading and information systems as the JSE. The NSX is accordingly changing its infrastructure and positioning itself to be ready for the implementation of the new trading system during the first half of 2002.
As part of the new information system, all share prices of companies listed on the NSX will in future be calculated and quoted by the Financial Times Stock Exchange (FTSE). FTSE has a strong global presence as well as a successful history of calculating world indices. The NSX's relationship with FTSE will enable us to leverage FTSE's marketing channels. The NSX will be in a better position to develop new market-related indices in a shorter period of time as well as develop a more prominent image in the global arena.
