Investing and Trading on the Namibian Stock Exchange (NSX)
The Namibian Stock Exchange was founded in 1904 and is the only stock exchange in Namibia. The NSX is one of the largest (2nd biggest) stock exchanges on the African continent. It is in partnership with neighboring South Africa’s Johannesburg Stock Exchange (JSE) and as of 2017, there are 44 listings on the NSX. These are companies whose shares are traded publicly. In 2018, the market capitalization of the NSX was N$2 Trillion (Namibia Dollars).
Companies listed on a stock exchange raise funds by issuing shares. The listing, otherwise known as an initial public offering (IPO), enables affording and interested members of the public to own a piece of a listed company. Because companies use public funds, they become liable to regulatory bodies, such as NAMFISA and legislation — in this case, the Stock Exchanges Control Act (1985 and 1992).
Investment is a form of wealth creation, in my opinion — one of the biggest and most lucrative forms of wealth creation. As an investor, your only job is to study the businesses you are looking to invest in. As lightly as that sounds, it is a very demanding and deeply analytical type of research into a company and its operations.
You need to understand the problem they are solving to determine the relevance and longevity of the business. Comprehend the solution(s) offered and match it against competitors, global technology advancements, and market changes. Look at the executive team, the company culture, and ethos — will the team carry out the vision? Most importantly, analyze the numbers! Does the share price make sense? Do the growth trajectory projections align with your desired investment outcome? And perhaps finally, follow Warren Buffet and read The Intelligent Investor by Benjamin Graham.
Back to the NSX and investing on a stock exchange, there is a procedure that needs following. Firstly you need to pick a broker. Brokers are authorized intermediaries to trade financial assets on a stock exchange. You cannot trade on your own. A few brokers for the interested investor in Namibia are Simonis Storm Securities, IJG Securities (Pty) LTD, PSG Wealth Management (Pty) LTD, Cirrus Securities (Pty) LTD, etc. After finding your preferred broker, you need to open an account with them.
Once your trading account is open and you have committed a financial amount, you need to decide the Asset you intend to trade. These are all or some of the following: Shares, Sovereign Bonds, or Corporate Bonds.
The NSX gives you access to trading assets from companies like B2Gold Corporation (B2G), Capricorn Group Limited (CGP), First Rand Namibia Limited (FNB), Letshego Holdings Limited (LHN), Mediclinic International PLC (MEP), Namibia Breweries Limited (NBS), Old Mutual Limited (OMM), Shoprite Holding Limited (SRH), etc.
Investing changes the game. Not only do you remain a consumer and customer — you become a part-owner. You can always increase your stake in a company by committing more financial assets over time. Go out and buy those shares, Namibia.
Happy Investing!
ZS
