Namibian Group Plans Second Bid to Start Stock Exchange

NamFin-X, a group of Namibian and international investors, is reapplying for a license to establish a new securities exchange in the country, after an initial bid was stalled by regulators seeking more information.

The revised application should be presented this week and NamFin-X will start recruiting staff for the exchange once regulatory approval is granted, Helmut Angula, one of the founders of NamFin-X, said by phone from the capital, Windhoek.

“It’s a matter of how soon they can process the application and grant the license,” said Angula, a former finance minister who left government in 2010. “We know it’s quite a lengthy process, but we hope it will not be too long.”

The granting of a license for a second bourse in the southwest African country was delayed after regulator Namibia Financial Institutions Supervisory Authority sought “more technical information and a detailed analysis” from NamFin-X. The authority said the initial application had a lack of adequate information on its “shareholding structure and proposed capitalization.”

NamFin-X is controlled by Namibian and so-far unidentified foreign investors. Angula said he couldn’t identify the non-Namibian partners before the regulator’s approval.

A second exchange “would broaden and deepen Namibia’s financial and capital markets,” making it easier for companies to raise funds from investors, and could provide a means of keeping the savings of citizens within the country, Angula said.

‘Narrow Focus’

“There is a narrow focus when it comes to the capital markets,” he said. “Most local companies do not have capital, not because there is a lack of it in Namibia -- it is because they do not have anywhere to go to raise capital,” he said. “Most of Namibia’s savings are outside the country. Our thrust is to ensure that at least a sizable chunk of capital stays within the country and is used to develop the domestic market.”

The Namibian Stock Exchange, which has a partnership with the Johannesburg bourse in South Africa, has 34 listed companies and had a market capitalization of 18.7 billion Namibian dollars ($1.7 billion) as of December 2013, according to the nation’s markets regulator.

Limitations to Namibia’s banking industry and a lack of local investment opportunities contributed to capital outflows in 2012 of 4.5 billion Namibian dollars to neighboring South Africa, the central bank said last October.

“Over the years, Namibia generated large private savings, which continue to be largely invested abroad, particularly in South Africa,” Bank of Namibia Governor Ipumbu Shiimi said on Sept. 25 at its annual symposium.

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