Govt policy impacts NSX drive
Featured

19 October 2018
Author   Roadwin Chirara

As the Namibia Stock Exchange (NSX) moves to lure more companies to list deepening investment options available, the bourse says the June decision by the Ministry of Fisheries and Marine Resources to exclude listed companies from applying for fishing quotas hampers its growth drive. As the Namibia Stock Exchange (NSX) moves to lure more companies to list deepening investment options available, the bourse says the June decision by the Ministry of Fisheries and Marine Resources to exclude listed companies from applying for fishing quotas hampers its growth drive. 

Minister of Fisheries and Marine Resources, Bernard Esau, in June 2018 told Parliament that fishing companies listed on the stock market will not qualify for fishing rights going forward, since the fishing rights were exclusively meant for Namibians, and it is difficult to monitor listed companies because share ownership changes constantly.
The move would have affected listed Bidvest Namibia’s Bidfish, whose unit previously consisted of Namsov Fishing Enterprises, Trachurus Fishing, United Fishing Enterprise, Twafika, Telelestai and Pesca Fresca. However, the company opted to dispose of its entire fishing business by selling it to Tunacor Fisheries Limited.
Bidvest Namibia, through its wholly owned subsidiary Bidfish, indirectly owned 69.55 percent of Namsov Fishing Enterprises, which is the holding company of Bidfish’s primary fishing operations, which had been receiving sufficient levels of fishing quotas since 1997.
Erongo Marine Enterprises, a unit of the Oceana Group, refused comment on the government decision.
NSX Chief Executive Officer, Tiaan Bazuin said the policy decision was not made from an informed point of view.
“I think it is discriminatory and misses the point about what a listed company is. Any business form’s shareholding can change from time to time, listed companies make it easier and fully transparent as to who owns what, when,” he said.
Bazuin who has led the exchange since 2012, maintains the platform has a role to play when it comes to contributing towards government efforts to increase local participation and ownership in companies under the New Equitable Economic Empowerment Framework, but warned such a move could have a negative impact on the listed company share price.
“There should not be restrictions on who buys and sells. There is nothing to protect local investors from. If the foreign buyer wants to buy at a higher price than a local buyer then he should, as he may tomorrow want to sell again and then a local may want to buy. That’s what the exchange is there for – to create and regulate a market. What we can do is give preferential access in initial public offerings to locals first as has been done in the last IPOs such as Letshego and Bank Windhoek,” he said.
“If the rules of the game are clear we can make sure we create a solution, such as a restricted trading market (where only a certain portion of people may trade, as seen in BEE restricted markets) for locals only.” 
He, however, warned that these types of solutions may keep the price lower than if everyone is able to trade freely.
On whether the current listing requirements of the NSX are a hindrance to indigenous business persons also trying to raise capital, he said, “Our requirements are quite low if compared to more mature markets, so I believe they are fairly easy to reach. 
“The international requirements such as proper corporate governance and IFRS externally audited financial statements cannot be lowered as any investor needs these to be in place as a minimum.”
Bazuin said to cater for small to medium cap companies to list, the NSX had set up the Development Capital Board.
“We already set up the Development Capital Board with lower entry requirements. However as most of our local investors are institutions such as pension funds, they are mostly prohibited by their investment mandates to take higher risk investments into these types of businesses,” he said.
Bazuin said the passing of the Financial Institutions Markets Bill (FIM BILL) in Parliament, which seeks to consolidate and harmonise the laws regulating financial institutions and financial markets in Namibia, will allow for the setting up of a Central Securities Depository in the country, while companies continue to show interest on possible listings.
“For the CSD, we require the FIM Bill to be enacted and that appears to be well on track. On listings, we don’t predict, but certainly there is a renewed interest in listing since there is somewhat more regulatory certainty this year,” he said, although mum on whether it has engaged the Bank of Namibia (BoN) over its calls for local banks to list.
In June, BoN Governor Iipumbu Shiimi, advised foreign owned commercial banks to float shares on the NSX in order to meet local empowerment requirements.

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